A Munich court slapped a 201 million euro ($284 million) fine on Siemens in a corruption scandal that has rocked the German electrical and engineering giant, the company said Thursday, Oct. 4.
Siemens' head said the company accepted responsibility for the matter
The case of alleged corruption in its telecommunications division is one of several that have dogged the Munich-based company, which is facing other inquires over bribery and corruption allegations by officials in Italy, German and the United States.
The company also said an additional settlement of 179 million euros has been reached with the German tax authorities. A spokesman for the court confirmed that the inquiry was coming to a close.
Siemens said in a statement that the decision by the court and the settlement with the tax department "conclude the German investigations into illegal conduct and tax violations at Siemens' former Com Group."
Peter Löscher took over at the Munich-based company in July
Com Group is the former name of the company's telecommunications division.
"Today's decisions are important steps in clarifying and coming to terms with the misconduct which occurred in the past," Siemens chief executive Peter Löscher said in the statement. "Siemens accepts full responsibility in this matter."
Accused of paying for contracts
Siemens was suspected of bribing key union officials to secure industrial peace and of establishing a massive slush fund to obtain foreign contracts.
The company admitted that its own internal investigations uncovered 420 million euros in "questionable payments" dating back to 1999, although German press reports say the sum involved exceeded 1.5 billion euros.
The investigation into the company led to the resignations of Chairman Heinrich von Pierer and Chief Executive Officer Klaus Kleinfeld in April.
Other investigations continue
There are at least six investigations into Siemens' business practices
The vast investigation has also spawned investigations by the Swiss authorities and by the US stock market watchdog, the Securities and Exchange Commission.
"It's the closing of one chapter and that's certainly appreciated by the market,'' Bernd Laux, an analyst at Credit Agricole Cheuvreux in Frankfurt, told Bloomberg. "But the big and by far the most important chapter is the investigations by the SEC."
Also Thursday, court spokeswoman Margarete Nötzel said Munich prosecutors had filed charges against longtime Siemens manager Reinhard S. in connection with the ongoing scandal.
The charges are the first to be brought against a manager for the company. The case is not expect to be brought to trial until some time in 2008, Nötzel told the Associated Press.
Siemens employs 461,000 people, of whom 165,000 are in Germany, and manufactures telecommunications equipment, but also trains, power plants and medical equipment.