German engineering giant Siemens AG has been fined $800 million (586 million euros) by US authorities and an additional 395 million euros by German authorities. The company recently pleaded guilty to corruption charges.
Siemens will pay a big price for corruption
The biggest bribery scandal in German corporate history has become one of the most expensive after Siemens agreed to pay fines in both the United States and Germany on Monday, Dec. 15.
"Today we are, in essence, closing one of the unhappiest chapters in our 160-year history," Siemens Chairman Gerhard Cromme said.
The company announced it will pay fines of "approximately 1 billion euros." The staggering fines do not come as a complete surprise to the company, which last month set aside 1 billion euros for legal settlements.
Siemens was forced to fire most of its management board after the corruption scandal broke in 2006. The company spent more than $1 billion dollars bribing government officials, according to the charges. About 300 people have been investigated in connection with the affair.
Paying a high price
Siemens has been expecting heavy fines
The company is alleged to have bribed officials approximately 4,000 times to the tune of 1.3 billion euros between 2000 and 2006 with the goal of winning contracts abroad.
Siemens has been under investigation by the US Securities and Exchange Commission (SEC) as well as the Department of Justice because it is listed on the New York Stock Exchange.
Under the terms of the agreements, Siemensengaged Theo Waigel, a former German finance minister, as its compliance monitor to check that future business is honest.
"We regret what happened in the past. But we have learned from it and taken appropriate measures. Siemens is now a stronger company," said Peter Loescher, Siemens chief executive.
The $800 million penalty levied in the US is nearly 20 times more than any other foreign company has faced in the US for corruption. The US Justice Department, which settled the case together with the Securities and Exchange Commission, was to hold a press conference later Monday.
Meanwhile, in Munich, German prosecutors said they would fine the company 395 million euros for a "lack of control over its business activities," according to AP news agency.
This is in addition to the fine of 201 million euros levied against Siemens by German judges in October 2007 for misdeeds at Siemens' former telecommunications unit, Com Group.