updated 10/3/2006 8:50:58 AM ET 2006-10-03T12:50:58

The fugitive former CEO of software company Comverse Technology Inc. was granted bail by a Namibian court Tuesday while he awaits extradition to the United States to face charges for allegedly manipulating stock options.

Jacob “Kobi” Alexander was granted bail of about $1.3 million, his lawyer Richard Metcalfe said, on condition that he hands in his passport, is not allowed to leave the district of Namibia’s capital Windhoek and has to report twice a week to an Interpol inspector.

“We are extremely pleased,” Metcalfe said.

Alexander was arrested Sept. 26 in Windhoek at the request of the FBI after a two-month manhunt.

The Namibian government opposed bail at the request of the United States, arguing he could flee the country before a U.S. extradition request reached Namibian authorities.

However, Metcalfe said: “Magistrate Uatjo Uanivi found that the evidence presented for denying him bail were not convincing at all.

“There was no reason to believe he would not be willing to stay in Namibia pending extradition.”

The U.S. has 30 days to lodge an extradition request from the date of Alexander’s arrest. Only then will a formal hearing be held. U.S. Attorney Roslynn Mauskopf said last week she would seek Alexander’s swift extradition to face charges in federal court in the Brooklyn borough of New York.

Alexander only briefly referred to “the highly technical charges” against him during the first day of his bail hearing Monday and said he intends to plead not guilty.

In his affidavit filed with the court, Alexander, 54, an Israeli citizen, said he had been living in the desert country with his wife and three children since July and had transferred almost $16 million from Israel to Namibian commercial banks.

He said he entered the country legally, used his own name and did not try to hide his whereabouts from anyone.

Alexander, who has a two-year permit to live and work in Namibia, purchased a $500,000 house on the Windhoek Country Club Estate. His children attend the city’s international school.

According to his statement, he has invested a further $1.5 million in various business ventures in Namibia with local partners.

Authorities began hunting for Alexander in late July shortly before a criminal complaint was unsealed accusing him and two other former top executives of fraud.

Before he disappeared, Alexander allegedly transferred $57 million to Israel.

It is alleged that from 1991 through 2005, Alexander earned about $6.4 million by backdating stock options.

Two other defendants, former finance chief David Kreinberg and former senior general counsel William Sorin, surrendered in August and were released on $1 million bond each.

The complaint unsealed in federal court accuses the three men of making stock options more lucrative by backdating their exercise price to a low point in the stock’s value. Usually, a stock option’s exercise price coincides with the market value at the time of a grant to give the recipient an incentive to drive the price higher.

Prosecutors allege Kreinberg and Sorin earned about $1 million each on backdated options.

Several companies are under scrutiny by the Securities and Exchange Commission or the Department of Justice for possibly backdating stock option grants. Many other companies have launched internal probes of their stock option accounting practices.

Comverse also allegedly awarded thousands of stock options to fictional employees, then secretly transferred the awards to an internal account under the name I.M. Fanton, which stood for “phantom,” court papers said. The scheme allowed Alexander to award those options to real “favored employees” and to himself without approval from Comverse’s board of directors, the papers added.

Comverse Technology is headquartered in Woodbury, New York, giving Brooklyn prosecutors jurisdiction over the case.

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