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Fresh arrests in Siemens corruption scandal

Two more people have been arrested in connection with a corruption scandal involving German electronics and engineering giant Siemens AG, a company spokesman said Thursday.

The pair were detained in connection with irregularities in the company's fixed-line telecommunications segment known as Com, Siemens AG said in a statement. The arrests come days after Siemens board member Johannes Feldmayer, 50, was detained as part of a widening bribery probe that has badly shaken the concern. Feldmayer, who asked to be relieved of his duties while the investigation is under way, was in charge of overseeing Siemens' IT services and its European business.

He was arrested over payments made to Wilhelm Schelsky, founder of the Independent Labour Representation (AUB) union and former head of Siemens' works council, who was arrested last month. Schelsky's consulting firm is alleged to have received payments of more than €14 million ($18.7 million) over five years without rendering any corresponding return for services. The two persons whose arrests were announced Thursday were not senior managers, the company said. One had since left the company and the other had been suspended, it added.

Prosecutors said the pair had been released on bail after questioning. „Siemens is cooperating with prosecutors and has made available to them all the documents they require,” the company said. The new arrests have added to the pressure on Siemens CEO Klaus Kleinfeld, who has been cleared of any involvement in the scandal, which surfaced in November 2006, following a series of police raids. Munich-based Siemens believes that up to €420 million  may be involved in the scandal with the trail of possibly dubious transactions and secret bank accounts dating back about seven years.

This could also involve company money which is believed to have been siphoned off into secret accounts thought to be used to help secure key overseas contracts. A series of present and former Siemens' employees have been arrested since the scandal broke in the wake of corruption claims at leading German companies, including carmakers DaimlerChrysler AG and Volkswagen AG. (news.monstersandcritics.com)