Siemens to confiscate former directors' stock options

15th December 2008, Comments 0 comments

The move affects Heinrich von Pierer who reportedly ignored corrupt practices at the company.

Berlin -- German industrial giant Siemens plans to confiscate stock options belonging to former boss Heinrich von Pierer who has been accused of ignoring corrupt practices at the company, a press report said on Friday.

The action would probably also affect other former Siemens directors, the Sueddeutsche Zeitung newspaper said, citing a company source.

It said that von Pierer, the iconic former head of Siemens, and colleagues had benefited like many other multinational managers from stock option programs worth several million euros (dollars).

The options allow company directors to buy shares in the company at a set price and date, which generally results in comfortable capital gains when they are sold later.

Options held by von Pierer and others come due shortly but the Siemens supervisory board has decided to freeze them, the newspaper said.

Faces with a widespread corruption scandal, the group has turned against its former management, in particular von Pierer, who ran Siemens from 1992 to 2005 and than headed its supervisory board for two years.

The company has already decided to claim compensation from former directors, which allegedly looked the other way as the company paid bribes to obtain foreign contracts.

The scandal erupted in 2007 and has cost the German conglomerate dearly.

On Thursday, Siemens said it was close to reaching agreement with the US Securities and Exchange Commission (SEC) on a possibly heavy fine in connection with the scandal.

The 161-year-old conglomerate, which makes everything from nuclear power stations to trains and light bulbs, and employs some 400,000 people worldwide, has acknowledged that up to 1.3 billion euros (1.7 billion dollars) may have been used illegally to win foreign contracts.

Siemens found the practice was widespread across its numerous divisions.

The German group recently made provisions of one billion euros against potential fines in both Germany and the United States.


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