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Bribes-for-Business: Siemens AG Sues 11 former management board executives

By Amarendra Bhushan for CEOWORLD Magazine Updated:July 31, 2008

$2 billion bribes-for-business scandal. German electronics and engineering giant Siemens AG Sues 11 former management board executives, including former CEOs Heinrich von Pierer and Klaus Kleinfeld (e CEO of aluminum maker Alcoa Inc.). The German electronics and engineering company said it is seeking repayment of damages from the former members of the board’s Corporate Executive Committee but would wait to take legal action until the individuals have stated their positions.

Alcoa released a brief statement “Alcoa continues to monitor the situation, and believes no further comment or action is warranted or necessary at this time. The board believes it is well informed of all pertinent information in this matter.”

Kleinfeld: I have great faith in the German judicial system, and that is why I am not concerned about this development.”

Prosecutors said the ex-manager, Reinhard Siekaczek, set up a complex network of shell corporations to siphon off company money over several years. They said the money was used as bribes to help secure contracts abroad by paying off would-be suppliers, government officials and potential customers.

- Siemens’ decision to seek financial damages from former executives is a warning to the rest of German industry.

- Siemens’ supervisory board is chaired by:
Gerhard Cromme, former CEO ThyssenKrupp
Josef Ackermann, the CEO of Deutsche Bank
Michael Dieckmann, CEO of Allianz AG

- allegations: illegal business practices, extensive bribery.

- dubious payments of up to 1.3 billion euros ($2 billion)

- total costs incurred by the scandal at 1.9 billion euros (nearly $3 billion)

- List:
Heinrich von Pierer
Klaus Kleinfeld
Johannes Feldmayer
Thomas Ganswindt
Edward Krubasik
Rudi Lamprecht
Heinz-Joachim Neubuerger
Juergen Radomski
Uriel Sharef
Klaus Wucherer
Guenter Wilhelm

- Kleinfeld was replaced by Peter Loescher.

- Siemens shares rose 1.8 percent to 73.19 euros ($114) in Frankfurt.

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