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	<title>lanarkshire business &#187; business event</title>
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		<title>Ikea  Attempts  To  Build  Public Case Against Russian  Corruption</title>
		<link>http://www.lanarkshirebusiness.com/ikea-attempts-to-build-public-case-against-russian-corruption.html</link>
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		<pubDate>Fri, 02 Oct 2009 19:05:16 +0000</pubDate>
		<dc:creator>Business Tips and Articles</dc:creator>
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		<category><![CDATA[business current event]]></category>
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		<description><![CDATA[MOSCOW — Weeks before the opening of its flagship store outside Moscow in 2000, Ikea was approached by employees of a urban utility firm . If the Swedish retailer wanted to have power for its grand opening, it had to pay a bribe . Instead, Ikea rented diesel generators large enough to power a shopping [...]]]></description>
			<content:encoded><![CDATA[<p>MOSCOW — Weeks before the  opening  of its flagship  store  outside Moscow in 2000, Ikea was approached by employees of a  urban  utility  firm . If the Swedish  retailer  wanted to have  power  for its grand opening, it had to pay a  bribe .</p>
<p>Instead, Ikea rented diesel  generators  large enough to power a shopping  mall . The  engines  roared to life in a loud  rebuke  to the corrupt executives who thought they had the  retailer  cornered, and soon the utility turned on the  power . </p>
<p>As Ikea opened  markets  across Russia, and became one of the most  outspoken  Western corporate critics of Russian  corruption , renting  generators  to thwart  removing  from  power   companies  became standard practice. Ikea executives took great pride in their creative solution — renting  generators  “instead of putting ourselves into a squeeze,” as Christer Thordson, an Ikea board member and global  director  of legal affairs, put it in an interview. </p>
<p>But Russian  graft  may have proved more  stubborn  than Ikea. </p>
<p>The board of Ikea’s operating  firm , which is based in the Netherlands, has concluded that the Russian executive hired to  control  the generators was taking kickbacks from the rental  company  to substantially  inflate  the  price  of the service. Ikea said that such a  deception  could cost it about $196 million over two years. </p>
<p>Ikea canceled the contract and sought  redress  in Russian  local  court. But in rulings over the last two weeks, Ikea has lost another 5 million euros in damages that the judges awarded the  generator  rental  firm  for breach of  contract . </p>
<p>Ikea  disclosed  the  details  of its loss to The New York Times last month, saying that it hoped publicity might  compel  the Russian authorities to investigate. </p>
<p>“We have  encountered  something here that is outside the  scope  of what we normally encounter,” Mr. Thordson said, describing the  universal  retailer’s situation in Russia. “I have never experienced anything like this.” </p>
<p>The  leader  of the  engine  rental  company  and the former Ikea employee accused of accepting  bribes  denied any wrongdoing. </p>
<p>Russia is a maddeningly  opaque  but potentially  profitable   market  of 140 million people, whose incomes are  supported  by trickle-down oil  wealth . Many  global  businesses contend they must have a presence in Russia to  remain  competitive. On Thursday, Carrefour, the French hypermarket  chain , opened its second  store  in Russia. Wal-Mart, the world’s largest  retailer , has an advance  command  in Moscow but has yet to  sponsor .</p>
<p>Read other <a href='http://yourvideoforum.com' target='_blank'>current events news</a> and <a href='http://yourvideoforum.com' target='_blank'>business current event</a> on the <a href='http://yourvideoforum.com' target='_blank'>current events news</a>.</p>
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