While the Paris Appeals Court is expected to decide Friday whether Alcatel CIT SA managing director Pierre Guichet is granted his request for release from prison, the French press published extracts of the prosecuting judge’s report showing that Alcatel CIT overbilled France Telecom more than $125m on switching contracts between 1991 and 1993. The 15-page report was prepared by Judge Jean-Marie D’Huy following the October 13 seizure of PABX accounting documents at Alcatel CIT’s heaquarters in Velizy, in the Paris suburbs. He characterises it as provisional, given the size of the company and the short period he had to prepare it. That said, the report explains that the overbilling was in fact a case of Alcatel CIT’s negligence in reimbursing the operator for the difference between the real costs of equipment over the course of a three-year contract and the cost price that had been fixed at its signing. The three-year deal signed in 1991 for PABXs included a list of accounting rules that showed the theoretical cost for each product, which were supposed to have been checked at the end of each year against what Alcatel CIT really spent.
