Siemens to pay $1.3bn in settlements

SIEMENS WILL pay more than $1.3 billion to settle corruption probes in the US and Germany, it said yesterday, ending two years of uproar that rocked the German engineering conglomerate.

Wrapping up the biggest corporate corruption investigation in history, Siemens agreed to pay $800 million to settle a US investigation by the Department of Justice and the Securities and Exchange Commission (SEC) into bribes it paid to win contracts.

The US authorities said Siemens made almost $1.8 billion in improper payments to government officials and third parties from March 2001 to 2007 in elaborate schemes involving employees at all levels.

Siemens will also pay €395 million to resolve a similar bribes-for business investigation in Germany.

“Siemens will pay total fines and penalties of approximately €1 billion,” the company said in a statement.

Siemens set aside €1 billion in November to prepare for a settlement and end a scandal that cost the jobs of former chief executive Klaus Kleinfeld and ex-CEO and former supervisory board chairman Heinrich von Pierer.

Mr Von Pierer and Mr Kleinfeld, who resigned from their posts last year, have not been accused of crimes and both have denied any wrongdoing. Siemens brought in Austrian outsider Peter Loescher as chief executive last year to help clean up the mess.

Peter Solmssen, Siemens’s general counsel, told reporters after a US court hearing that the settlements mark the end of a chapter in the company’s history. “I don’t think anything of this size and scale has been this visible.”

In Washington, the US District Court for the District of Columbia accepted Siemens’s settlements of charges it violated the Foreign Corrupt Practices Act (FCPA) through a lack of internal controls and bookkeeping violations. Lori Weinstein, a trial attorney with the US Justice Department called the Siemens case “further reaching in scope and magnitude” than any other foreign corrupt practices case the department had ever seen.

As part of the settlement, Siemens agreed to appoint an independent monitor – later named as former German finance minister Theo Waigel – for up to four years and to co-operate with the US government’s continuing investigation in the case. No executives have yet been charged in relation to the case.

Siemens shares, which gained as much as 4.5 per cent in Frankfurt earlier on Monday on expectations the company would settle US corruption cases for less money than originally thought, closed down 0.5 per cent at €47.15. – (Reuters)