From Russia With Concern: Cisco's Audits Raised Red Flags About Resellers

[Ron Burgundy]

By Marina Lopes and Aruna Viswanatha NEW YORK/WASHINGTON (Reuters) - In a series of audits in 2009, Cisco Systems Inc found that much of the business between resellers of its products and a Russian state-owned telecommunications company, Svyazinvest, could not be verified because it was either "misrepresented" or documents were withheld by the resellers, according to an executive summary of the audits reviewed by Reuters. The June 2009 report on the audits, other internal Cisco documents, and interviews with two sources familiar with the situation, raise questions about whether the company knew what was happening to telecom equipment sales going through its resellers in Russia, as well as whether discounts were passed on to customers as planned. Cisco, like many Western companies, often relies on local resellers, or distributors, to sell its products in such countries.

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