Siemens to sue former directors

29th July 2008, Comments 0 comments

Engineering giant Siemens is to sue two former directors who plunged the company into crisis by establishing a culture of bribery and illicit payoffs to secure deals

Munich -- German conglomerate Siemens decided Tuesday to sue two former chief executives for setting up a system of corruption that paid kickbacks to secure lucrative foreign contracts.

The supervisory board of the German electronics and engineering group decided claims should be brought against 10 former members of the main executive board who left as the scandal was exposed.

They include two former chief executives, Heinrich von Pierer and Klaus Kleinfeld. The company accuses them of lapses from their duty to keep the company organization well-run in the period 2003 to 2006.

The decision to sue is a first in the normally cosy world of big German corporations where past management errors are usually ignored.

An internal inquiry has exposed 1.3 billion euros in payments by Siemens for apparently fictitious services by "consultants." In reality the money was used to buy influence, investigators believe.

On Monday, a court convicted the first senior former Siemens executive of misappropriation. Reinhard S, who ran Siemens' ICN division, received a suspended two-year jail term and a fine of 108,000 euros (169,000 US dollars).

German business has suffered a number of embarrassing revelations in the past year, including that T-Mobile had spied on staff members and journalists, engaging in corporate espionage.


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