1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Dirty Business

DW staff (sp)August 2, 2008

Greek phone company OTE has filed a suit in Munich demanding German engineering group Siemens group disclose how it bribed Greek executives to buy overpriced telephone equipment, according to a news report.

Man wearing dark glasses reflecting dollars
Siemens has spent over a billion euros in bribes so farImage: AP

The move could lead to the first lawsuit by a non-German business client demanding compensation for abuse of the contract process, newspaper Sueddeutsche Zeitung reported on Saturday, Aug 2.

OTE wants the court to order Siemens to reveal details of an internal inquiry into its activities in Greece, with a view to eventually suing for damages.

Greek prosecutors are investigating the 1997 contract which Siemens is suspected of securing by paying 75 million dollars to OTE executives.

Sueddeutsche said OTE would seek compensation over a letter of intent dating from 1997 which led to OTE buying equipment worth 1 billion euros from Siemens to improve Greek phone systems.

Siemens logo
Siemens' reputation has taken a batteringImage: AP

In another report, German news weekly Der Spiegel said a law firm hired by Siemens to sue 11 former executives for failing to uncover and halt the scandal had already conducted a detailed inquiry.

The lawyers maintained that internal checks to prevent corruption had been "objectively faulty" as early as 2001, Spiegel said.

The affair has rocked the two main political parties in Greece, the ruling New Democracy conservatives and the opposition Pasok socialists. The Greek media has speculated that officials on both sides received perks, gifts and payments from Siemens slush funds.

Tarnished by corruption scandal

Siemens, a sprawling conglomerate and one of the world's best known companies, has been badly hit by the corruption scandal which first broke in late 2006.

The German electronics and engineering group has purged its management and is seeking to avoid US Securities and Exchange Commission (SEC) fines over the misuse of corporate revenues.

The group, which employs 400,000 people around the world and makes a broad range of products including household appliances, medical equipment, trains, turbines and power stations, acknowledged following an internal probe that 1.3 billion euros ($2 billion) disappeared into various funds. It said it had found evidence of violations across the company and in several countries including Greece and Italy.

German investigators have since determined that payments to obtain foreign contracts were a widespread practice among Siemens multiple divisions.

Siemens has said it is cooperating in all the investigations, and has introduced changes designed to make its corporate structure leaner and more transparent.