German opposition to US law weakens

German opposition to new US accounting rules began to disintegrate yesterday, with two leading firms signalling they would adhere to laws tightening supervision of company accounts.

Dialysis services provider Fresenius Medical Care said it would adhere in full to the Sarbanes-Oxley laws, while sources at Siemens said the engineering and electronics group would not take part in a protest against rules laid down by the US Securities and Exchange Commission (SEC).

"We will fully accept the new rules of the SEC," a Fresenius spokesman said. The company, the world's largest in its sector, is listed on the blue-chip DAX index and has a US listing.

More than 20 German firms have US listings, from auto giant DaimlerChrysler and software group SAP to pharmaceuticals groups Bayer and Altana.

German industry association BDI said last week the firms would write to the SEC, arguing that some of the conditions in the new laws were not consistent with German legislation and business practice.

The new regulations, aimed at cleaning up company accounts in the wake of a series of financial scandals at major American companies, include provisions obliging chief executives and chief financial officers to swear an oath certifying their accounts as accurate and fair.

German firms are particularly opposed to rules that would give regulators the power to demand working audit papers from a company's auditor, even where the auditor is a non-US firm.

The BDI said in a statement yesterday that, although German companies listed in New York supported the new Sarbanes-Oxley legislation, they were asking the SEC to investigate more closely potential conflicts with foreign laws.

In a separate letter to European Union internal markets commissioner Mr Frits Bolkestein, the German justice ministry recommended that countries affected should seek their own arrangements, saying US laws could not be applied abroad.

Reaction from the companies themselves has been cautious, with several saying they were still assessing the situation but most accepting they had no choice but to comply with the rules. - (Reuters)