Siemens AG suspended three employees who allegedly participated in collusion in the market for power transformers, three weeks after the company was fined for fixing the price of equipment used to control the flow of electricity.
According to Siemens's internal findings, five companies were involved in the collusion, which took place in the German market between 2001 and 2003, the Munich-based company said in an e-mailed statement today. „We want any improprieties to be clarified quickly and expediently, and we are taking appropriate action,” Udo Niehage, head of Siemens's power transmission and distribution unit, said in the statement. Siemens is Europe's biggest engineering company. The collusion allegations come three weeks Siemens and nine other companies were fined €750.7 million ($978.2 million) by European Union regulators for fixing the price of gas-insulated switches. The cases involving power transformers and gas-insulated switches aren't related to each other, Siemens spokesman Marc Langendorf said by phone today. The new allegations are increasing pressure on Siemens to explain how cases of bribery, collusion and price-fixing went unchecked by top management. Siemens is also the target of investigations into whether customers where bribed to win orders for its communication unit.
European Union Competition Commissioner Neelie Kroes has been cracking down on cartels since taking over from Mario Monti in 2004. Siemens said it started its own investigations into the power transformers business after the EU commission „investigated” company locations last week in Nuremberg, Germany and Linz, Austria. The facility in Linz belongs to VA Tech, which Siemens acquired in July 2005. The EU's commission said in a separate statement today it made „unannounced inspections” at the offices of unspecified companies on February 7 and February 8 in France, Germany and Austria. The EU commission is investigating collusion in the market for power transformers between 1999 and 2003, Siemens said. The initial internal findings indicate that employees of PTD and VA Tech participated in collusion between 2001 and 2003. The investigations also found that the collusion involved five companies and took place in the German market, Siemens said, without naming the other companies. Siemens is „interested in the rapid and complete clarification of this matter and has promised the EU commission its full support and cooperation,” the company said. (Bloomberg)