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AT&T is under pressure to address a sexual assault scandal at the tech company Afiniti, which relies on the $170bn telecoms giant for most of its revenue.
The American operator is understood to account for up to two thirds of Afiniti’s revenue after signing a deal worth more than $100m (£75m) in 2019, but has not publicly responded to the crisis engulfing the company and its dethroned founder Zia Chishti.
Tatiana Spottiswoode, a former employee, has alleged that Mr Chishti abused and harassed her and at least one other staff member on company work trips abroad, leading the board to sack him this month. The claims led David Cameron, the former prime minister, to quit as a senior adviser to the company, and customers including Sky and Liberty Global have said they are assessing their options.
Telecoms sources said that some Afiniti customers are seeking to develop their own versions of its technology, which helps manage queues of callers to customer service centres.
Nancy Erika Smith, Ms Spottiswoode’s lawyer, called on Texas-based AT&T to hold Afiniti accountable, saying customers have a “powerful voice” to force changes.
“Customers such as AT&T are becoming more active in rejecting the products and services of companies which enable and cover up sexual harassment, abuse and other types of discrimination,” she said.
“Customers and shareholders should assign responsibility to board members and the companies that prop up the harassers and enablers. Money talks and customers have a powerful voice. I hope they use it.”
AT&T promotes itself as a champion of women in the workplace. On its website it says: “Women are core to the foundation of AT&T. They help push our company forward and inspire others to do the same.”
Its “principles of conduct for suppliers”, also published on the AT&T website, says: “AT&T expects suppliers to treat all employees with respect and dignity. The use of corporal punishment, threats of violence, physical abuse or other forms of physical coercion, harassment, or intimidation are not tolerated.”
Mr Chishti, a 50-year-old Pakistani-American who previously enjoyed success with a business making transparent braces for teeth, has denied wrongdoing. He has describer Ms Spottiswoode’s allegations as “particularly hurtful” because “one of my priorities [is] to see that they [women] do absolutely as well as they can”.
AT&T’s links with Afiniti and Mr Chishti are under scrutiny as more members of Afiniti’s advisory board follow Mr Cameron to the exit.
The Telegraph understands that Mike Mullen, the former US defence chief, has resigned from the board, alongside Andrea Wong, a former Hollywood executive, and Tom Glocer, the former head of Thomson Reuters.
Admiral Mullen, the chairman of the joint chiefs of staff during George W Bush and Barack Obama’s presidencies, was one of the board’s most prominent figures.
Mr Chishti has been forced to step down and Afiniti has launched an investigation into claims of sexual harassment at the company, but he retains influence through his leadership of TRG, its biggest shareholder.
Afiniti initially said that it had examined Ms Spottiswoode’s claims and concluded that they were untrue, despite an independent arbitration finding against Mr Chishti.
A source said: “Zia left in response to customer outrage and he’s banking on the fact that customers see the headlines, feel they’ve ticked the box, and won’t pick up on the second order influence.”
Afiniti continues to employ Princess Beatrice as its vice-president of partnerships and strategy. She is on maternity leave after giving birth to her daughter, Sienna, in September.
AT&T did not respond to requests for comment.
ANALYSIS: Afiniti’s former boss still looms large over its power network
Zia Chishti has been toppled as the head of the software firm but continues to control a key shareholder
When the Dassault Falcon 900 private jet touched down on the tarmac at Innsbruck Airport two weeks ago, Zia Chishti had little idea of what was about to come.
Afiniti, his call centre software firm, was on the up. Revenue had more than doubled over the last two years and a game-changing deal with US telecoms giant AT&T had been signed.
A long-promised New York flotation did not seem out of the question for the company, which boasted an unrivalled network of powerful names.
Globetrotting founder Chishti had purchased the jet, which typically retails for around £6m, a year earlier. A keen skier, he was expected to sample Austria’s slopes as part of a business trip to Europe.
But just three days later Chishti’s fortunes took a downward spiral. Tatiana Spottiswoode, a former employee, alleged that the Pakistani-American entrepreneur, 50, had repeatedly sexually abused and harassed her. She claimed he “groomed” her from a young age after being introduced by her father.
According to Spottiswoode, Chishti - twice her age - had shown her a lavish lifestyle of travel and pursued her for months before a short relationship, which she broke off.
She said the businessman then offered the young student at the time a $60,000 (£45,000) salary to join Afiniti, where he “oscillated between pressuring me for sex and punishing me”.
When she rejected him, Chishti made her fear for her job, Spottiswoode said. When he got his way, he allegedly beat her, leaving injuries and signs of concussion during one hotel room encounter in Brazil. She claims he also harrassed at least one other staff member on company work trips abroad.
Chishti would send Spottiswoode messages detailing his “rape fantasy”. After one encounter, she added, “he told me he should have had sex with me when we first met, when I was thirteen years old”.
Spottiswoode’s testimony to a US Congressional committee sent Afiniti and its high-flying boss into crisis mode. The following morning David Cameron quit as chairman of the artificial intelligence firm’s high-profile advisory board. Customers and investors, which include Sky and Virgin Media O2 owner Liberty Global, said they were considering their options.
Since it was founded in 2005, the company has attracted a circle of influential politicians and business leaders as advisers and board members that gave the start-up links to the rich and famous. Now, as Chishti’s reputation fast unravels and the spotlight shines on Afiniti, the question begs as to whether the scandal will really change the future of the company.
For the last two weeks the founder has remained in Austria fielding Zoom crisis meetings, instead of returning to Afiniti’s Bermuda headquarters, its New York base at the top of the Chrysler building or its Washington DC offices across the street from the White House.
He has cut a defiant figure, maintaining the relationship was consensual, while Spottiswoode has provided graphic images of bruises he allegedly caused.
At first, Afiniti’s board and senior management stood by him. Chief commercial officer Tom Inskip, a close ally and an Eton schoolmate of the Duke of Sussex, told staff Chishti refuted the allegations and would stay on to clear his name. But less than 48 hours later, the founder was forced out as Afiniti’s chief executive and chairman, a decision that one source says was down to pressure from customers.
“Zia left in response to customer outrage and he’s banking on the fact that customers see the headlines, feel they’ve ticked the box, and won’t pick up on the second order influence,” a source said.
Afiniti itself has spent the days since attempting to wipe the slate clean while its famed insiders have had mixed reactions.
Last week, new chairman Larry Babbio announced that Leslie Caldwell, a former US prosecutor who led the Justice Department’s Enron task force, would investigate claims of sexual assault including who knew about Chishti’s alleged conduct.
At a meeting for female employees on Tuesday, Babbio told staff that if his granddaughters worked in an environment like the one Spottiswoode had alleged, “I would tell them to leave or fix it,” pledging: “I’m going to fix it.”
In 2017 Afiniti hired Princess Beatrice, who has been urged to quit, as its head of strategy and partnerships, while Cameron joined two years later. Its board includes Jose Maria Aznar, the former Spanish prime minister and John Snow, George W Bush’s Treasury Secretary.
The advisory board, which met four times a year, included the former French prime minister Francois Fillon and the ex-BP boss Lord Browne, though more than half of the panel was wiped from Afiniti’s website last year. According to one insider, this was a rare display of financial discipline at the company, where lavish parties in far-flung locations were common. Three more of the board have also left after Cameron.
But although the company’s founder is ostensibly out, executives are believed to have raised concerns that he continues to wield power through a complex ownership structure and a web of relationships.
Afiniti’s largest shareholder is TRG International, an investment firm registered in the British Virgin Islands. It is 45pc owned by TRG Pakistan, listed in Karachi. Chishti remains TRG Pakistan’s chief executive and one of its largest shareholders. Combined with Chishti’s own stake in Afiniti, TRG exercises ultimate control over the company.
For now, Chishti remains in charge at TRG. The company announced on Friday that it would hold a board meeting in two weeks to consider matters “other than financial results”, expected to refer to its chief executive.
However, Pakistani law requires three-quarters of directors to fire a chief executive and Chishti is supported by allies such as Ali Siddiqui.
His influence at Afiniti is also likely to remain. Last week Abdul Hafeez Sheikh, the former Pakistani finance minister and an associate of TRG director Ali Jameel, replaced him on the company’s board.
Insiders say much of the company has been built on relationships and connections among the business and social elite.
Cameron is believed to have been introduced to the company by Archie Soames, a great grandson of Winston Churchill who works in Afiniti’s London office.
Alonso Aznar, the son of Afiniti director and former Spanish prime minister Jose Maria Aznar, is the company’s head of growth. Maria Osorio and Cecilia Braggiotti, the daughters of bankers Antonio Horta-Osorio and Gerardo Braggiotti, have senior positions, as does Jerome de Castries - the son of former Axa boss Henri de Castries.
Julia de Boinville, a former managing director at the company, runs an anti-slavery charity with Princess Eugenie, Beatrice’s sister.
Spottiswoode claimed that she was not the only victim of Chishti’s alleged behaviour and that the company had no harassment training, while reports have suggested the board knew about her claims in 2018.
An Afiniti spokesman said that Caldwell’s investigation would leave no stone unturned. “Ms Caldwell is leading a thorough investigation into issues surrounding the conduct of our former CEO. Ms Caldwell will have full and complete access to Afiniti records, personnel, and any other materials or information she needs to carry out the investigation.”
The company added: “Since Mr Chishti’s departure, he has had no role in the management or operations of the company. Larry Babbio is now chair of the board and we are very confident in his leadership.”
But, as long as he stays in charge of Afiniti’s key investor, Chishti’s influence is likely to linger. Shares in TRG Pakistan have fallen by more than 30pc since Spottiswoode’s allegations emerged. Eventually, even Chishti may run out of allies.