Cisco's credibility problems

Company admittedly lost some with Wall Street; now add Chinese dissidents, Canadian authorities and customers to the mix

As Cisco grapples with its own internal issues - getting back to basics with routing and switching, while streamlining its product lines and investments to regain lost profitability...and credibility with investors - it's got some hefty external ones as well. The company is being dragged through the courts as it tries to restructure and realign operations.

This week, a second suit was filed against Cisco alleging cooperation with the Chinese government in cracking down on dissidents. This one claims Cisco optimized its equipment for and provided training to Chinese authorities and the government to track individuals engaging anonymously in pro-democracy political commentary on the Internet. It was filed on behalf of three Chinese writers who contribute to the websites of a Chinese political dissident who spent 19 years in Chinese forced-labor prison camps.

It follows last month's suit filed by the Falun Gong religious group, which charged that Cisco supplied technology to the Chinese government knowing it would be used to oppress the movement. Cisco denies both charges.

These, in turn, coincide with a case in Canada in which a judge blocked the extradition of a former Cisco executive to the U.S. and then accused Cisco of duping Canadian officials into arresting him.

Peter Alfred-Adekeye sued the company for alleged antitrust violations, claiming Cisco illegally required customers to buy service contracts in order to get software updates and patches. Cisco then countersued Alfred-Adekeye, alleging theft of software from Cisco. U.S. attorneys sought Alfred-Adekeye's arrest so they could extradite him to the U.S., where they said he faced 97 counts of computer crimes with a possible sentence of five years for each count.

But earlier this month, as reported by colleague Stephen Lawson of the IDG News Service, a justice of the British Columbia Supreme Court said those officials used false and misleading information to persuade other Canadian judges to order the arrest. The justice said Cisco seemed to have orchestrated the arrest to intimidate Alfred-Adekeye from pursuing his antitrust case against the company.

Alfred-Adekeye was released on bail 28 days after his arrest and has now returned to his home in Switzerland.

So Cisco has credibility issues with Wall Street, pro-democracy groups in China, and Canadian legal authorities. And with some customers. Regaining trust might be harder than regaining lost profitability or market share.

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