Siemens Pays Fine to End Corruption Probe

Oct. 4, 2007
Fine was $284 million

Siemens said on Oct. 4 it had agreed to pay a fine of 201 million euros (US$284 million) to end an investigation into corruption in its telecommunications division. The fine was set by a court in the southern German city of Munich, where Siemens has its headquarters.

The company also said a final settlement has been reached with the German tax authorities.

Siemens said that the decision by the court and the settlement with the tax authorities "conclude the German investigations into illegal conduct and tax violations at Siemens' former Com Group." Com Group is the former name of the company's telecommunications division.

"Today's decisions are important steps in clarifying and coming to terms with the misconduct which occurred in the past," Siemens chief executive Peter Loescher said. "Siemens accepts full responsibility in this matter."

Siemens was suspected of trying to bribe key union officials to secure industrial peace and of establishing a massive slush fund to obtain foreign contracts. The company admitted that its own internal investigations uncovered 420 million euros in "questionable payments" dating back to 1999, although German press reports say the sum involved exceeded 1.5 billion euros.

The vast investigation led to the replacement of Klaus Kleinfeld as chief executive and spawned investigations by the Swiss authorities and by the U.S stock market watchdog, the Securities and Exchange Commission.

The revelations of corruption at Siemens, one of Germany's oldest companies, shocked the country's business community. It employs 461,000 people, of which 165,000 are in Germany, and manufactures telecommunications equipment, but also trains, power plants and medical equipment.

Copyright Agence France-Presse, 2007

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!