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Altec Answers To OTEs Action

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Climaxing its totally inappropriate behavior, today OTE proceeded to unilaterally cut off some of the interconnection circuits of our subsidiary AltecTelecoms S.A., which is illegal and constitutes misuse of its dominant position.
OTE tried to explain its behavior in an announcement which is not based on real facts and is a stereotype that has nothing to do with our company. The actual facts are quite different from the picture that OTE is trying to create intentionally.
The actual facts and transactional practices can in no event justify such a behavior and, much more so, the cut-off of our circuits. This will be proved in a number of ways based on the judgment of Courts of Law and competent Administrative Authorities. It may be possible for OTE, due to its position, to act at its own discretion unilaterally and hastily.
For a number of years, since 2000, there have been serious invoicing problems with OTE, due to the arbitrary and ungrounded amounts charged to our company.
In a number of cases which involved quite high charges, OTE itself confirmed in writing (always in retrospect) that such charges were due to its own errors. To understand better what OTE means when it claims that we are in default, it is enough to refer to one of its own documents stating that certain charges amounting approximately to a total of Euro 1.3 million were groundless, whereas the actual amount due was only Euro 700,000.
This was the reason why there have been constant disagreements between the accounting departments of the two companies as to the exact amounts due. The amount we disagreed on last summer was over Euro 15 million. Following a negotiation which was carried out under similar pressuring conditions, our subsidiary was forced to agree on a settlement amounting to Euro 8.5 million, however, on the condition - which was included in a relevant written agreement - that all other groundless charges would be examined by competent OTE bodies by the end of the previous year, in order to be deleted.
The above settlement was reached under coercion, as OTE threatened that if we refused to accept it, it would proceed to cut off our circuits. Due to the above pressure, our subsidiary signed the agreement and started to make consistent payments in line with the above settlement, in addition to its other current liabilities.
During last July, our company was faced with certain temporary cash difficulties due to increased investments, which however, made the above situation even worse and thus the subsidiary tried to reach a reasonable arrangement with OTE. OTE, however, which is a supplier and competitor of ours at the same time, instead of having a dialogue with us to reach a mutually acceptable agreement, required that the securities provided by our subsidiary as collateral be marked refer to drawer and requested the forfeiture of our letters of guarantee. This was done, not only being aware of, but also in an effort to worsen the relations of our company and Group with the banking system.
Following an intermediary effort on the part of our crediting Banks, OTE, in its negotiation with the Banks, instead of trying to reach a reasonable settlement, according to usual market practices, kept raising new claims as to how payment would be made in order to lead the discussions to a dead end.
Actually, in an effort to make the amounts due by our subsidiary look even higher, OTE proceeded to include in the alleged overdue amounts the doubtful charges and the amounts that had already been settled.
After all this, even the Bank that had undertaken to coordinate the whole effort unofficially, expressed in writing its inability to provide any settlement or intermediary assistance. Thus our company, following consultation with the crediting Banks, made a proposal to OTE two days ago, on Thursday, in order to pay in cash and letters of guarantee the amount of Euro 10.2 million which would cover almost allits overdue payments.
In reply to the proposal, in the afternoon of the same day OTE accepted our proposal, but set a totally unreasonable condition, which was unattainable in the first place: that payment should be completed by 1:00 on Friday afternoon.
It was actually proved that the above ultimatum of OTE was just a pretense of accepting our proposal, since its administrative employees and executives do know that it is practically impossible (based on any banking procedure) to obtain loans in excess of Euro 10 million in just a few hours, and in the middle of August at that. Consequently, one can easily conclude that the cut-off or our circuits is part of an overall effort aimed, on the one hand, at exterminating our subsidiary and eliminating it form the competitive field of telecommunications by using unfair methods, and on the other hand, at fishing for its customers, especially as regards critical State telecommunications systems. OTE, however, did not take into account either the 300 persons employed by our company and the 1,400 persons employed by our Group or our 35,000 shareholders.
The above actions taken by OTE, actually a few days before full payment was to be made, are aimed at damaging the reputation of our subsidiary and harming its customers. OTE is actually trying to prevent any effort made by our company to pay the amounts due and cancel any action taken to ensure the collection of amounts due by OTE itself.
Due to the above illegal behavior on the part of OTE, our subsidiary will vindicate its legal rights by resorting to competent Authorities, as well as to national and European courts of law, not only to secure its business activity, but also to seek indemnification for the very serious commercial and business loss it has incurred contrary to the law.
However, the intentional and revengeful practices of OTE, as well as being obviously illegal, also compromise competition and, what is more important, are to the detriment of the OTE shareholders themselves and the Greek State at that.
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