Siemens will Pursue Former Executives for Damages

Company will go after Heinrich von Peirer and Klaus Kleinfeld

Siemens will sue 11 former directors for damages in connection with a corruption scandal which broke nearly two years ago, the company said on July 29. Among those targeted by the exceptional decision were former Siemens bosses Heinrich von Pierer and Klaus Kleinfeld, a statement said.

The group said the directors had "failed in their oversight duties and management between 2003 and 2006" and had caused Siemens to suffer "financial damage."

German justice officials are still investigating the corporate scandal, which erupted in late 2006 and has since shaken the sprawling industrial group to its core.

Siemens has acknowledged that 1.3 billion euros (US$2 billion) was funneled into various funds used to obtain foreign contracts, and that the practice was widespread across its numerous divisions.

Current chief executive Peter Loescher was brought in from outside the company to straighten out the mess, and one former Siemens executive, Reinhard Siekaczek, was convicted on July 28 in the first trial of a company director. Siekaczek was found guilty on 49 counts of breach of trust, given a two-year suspended sentence and ordered to pay 108,000 euros (US$170,000) in fines.

He was charged along with others of setting aside around 53 million euros to be used as bribes in exchange for contracts awarded to the telecommunications division that he worked for, but given a lighter sentence for having cooperated with the investigation. A probe ordered by the company itself found that similar practices existed within many of its divisions.

Prosecutors in southern Munich are still investigating around 300 people in connection with the affair.

Copyright Agence France-Presse, 2008

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