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Siemens chairman quits under corruption cloud - extended

Siemens AG supervisory board chairman Heinrich von Pierer resigned late Thursday amid a series of corruption scandals plaguing the industrial electronics giant, including alleged slush funds used for bribery to secure overseas contracts.

Gerhard Cromme is to replace him at a board meeting Wednesday, Siemens said. In a statement, von Pierer (66), who had been one of the most respected business managers in Germany and is an adviser to Chancellor Angela Merkel, denied personal involvement in the corruption scandal. „A personal responsibility in view of the ongoing investigations was not the reason for my decision,” he said. Von Pierer said he hoped that the appointment of a new chairman would help steer Siemens „out of the headlines and into calmer water.” Pressure had grown in the past weeks on von Pierer, who was Siemens chief executive during the years that the system of slush funds were established. The money, as much as $420 million ($570 million), was allegedly used over about seven years for bribes.

The head of Siemens' corporate governance commission is now leading an investigation into the charges. Cromme, who now serves as chairman of the board at ThyssenKrupp, is to head Siemens' board for the remainder of von Pierer's term, which ends at Siemens' annual general meeting on January 24, the company said. Von Pierer, who also led Siemens as CEO from 1992 to 2005, said his decision to step aside came easier given Siemens financial success. CEO Klaus Kleinfeld is to present Siemens latest earnings report next week. Industry sources said the report should not disappoint despite the bribery scandal. All the firm's divisions should meet the ambitious return targets set by Kleinfeld nearly two years ago.

Shares in electronics giant Siemens AG soared on Friday after supervisory board chairman Heinrich von Pierer resigned amid a series of corruption scandals. Siemens shares opened 3.5% higher at €90 ($121.50) on the Frankfurt stock exchange as the market reacted positively to the news. (monstersandcritics.com)