Are you sure?

Siemens ex-managers found guilty

The chief executive of the scandal-hit firm will step down in September.

Two former Siemens managers have been convicted by a German court of their involvement in paying €6 million (£4.1 million; $8 million) in bribes to win contracts. Andreas Kley, 63, received a two-year suspended sentence for bribery and breach of trust, while Horst Vigener, 73, was given nine months’ probation. The court also ordered the German engineering group to give up profits from the deal worth €98 million. The verdict is the first in a series of criminal probes involving Siemens.

Guilty verdict
The two men were found guilty of making payments to win contracts for gas turbines from Italian utility Enel between 1999 and 2002. The court ruled that in doing so, they knowingly broke the company’s corporate governance policy which forbids bribes. „It was an illegitimate use of company money, and that’s punishable,” the judge said. The judge said the sentences reflected the fact that the Italian officials at Enel had requested the illegal payments before contracts were agreed, rather than vice versa.

The prosecution had called for a much tougher jail sentence of three-and-a-half years for Kley, who was finance chief of Siemens’ turbines unit at the time, and are looking to appeal the decision. Siemens also said it would appeal the fine, which it said had „no basis in law or in fact”. „We maintain that the court’s order to forfeit the profits from two orders placed by Enel with Siemens’ power generation division for the supply of power plant equipment in 2000 and 2001 is illegal,” Siemens said.

Resignation prompted
Siemens, the biggest European engineering group by sales, has been rocked by fraud and corruption allegations, which have led to the arrest of a number of current and former executives in the firm’s telecoms unit. They are accused of running a slush fund of €200 million to help win overseas contracts. The corruption claims have prompted the resignation of former chairman Heinrich von Pierer while chief executive Klaus Kleinfeld has said he will stand down in September when his contract expires - though neither are personally implicated. (news.bbc.co.uk)