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Peter Loescher is Siemens' surprise new chief executive

German engineering giant Siemens on Sunday announced it had hired an Austrian pharmaceutical specialist as its new chief executive, a surprise choice for the firm dogged by corruption scandals.

Peter Loescher, a 49-year-old who currently runs US pharmaceutical giant Merck's Global Human Health division, takes over at Siemens on July 1.

Shares in Siemens were the biggest gainers in early trading on the Frankfurt Stock Exchange yesterday following the announcement of the appointment.

Siemens shares were showing a gain of 1.78 euros (US$2.39), or 1.92 percent, at 94.32 euros after the first 30 minutes trading, after earlier shooting up 2.7 percent to an intraday high of 95.00 euros.

The decision to hire an executive from outside the company was unexpected and seemed to signal a desire for a clean break from the weeks of turmoil that has enveloped the company.

"His upright character, his global background, his outstanding international reputation and his wide-ranging experience in business development and strategy, the financial markets and technology-related issues were the key factors in our decision," Siemens supervisory board's chairman, Gerhard Cromme, said in a statement.

"I am convinced that Mr Loescher has what it takes to steer Siemens through its current difficulties and into a better future," he said.

Loescher was appointed at a special meeting of the Siemens supervisory board to succeed Klaus Kleinfeld, who said last month he would leave his post by September to allow Siemens to focus on weathering far-reaching corruption scandals. Kleinfeld has not personally been implicated.

The controversy led to the resignation of Heinrich von Pierer as supervisory board chairman.

Loescher said after his appointment that he considered the job "a great honor and an extraordinary challenge."

"I know Siemens as one of the world's foremost corporate addresses and as a company with a rich tradition and strong foundations," he said in a statement. "My wife, my children and I are all delighted to be moving back to Europe and to Germany."

Loescher's appointment came a few days after the previous favorite, Wolfgang Reitzle, chief executive of German industrial gas giant Linde, said he preferred to stay where he was.

Siemens is suspected of trying to bribe key union officials to secure industrial peace, and of setting up a massive slush-fund to obtain foreign contracts. Some 400 million euros (US$540 million) are said to have been used for bribes in telecommunications contracts.

Siemens is Germany's biggest employer and has more than 450,000 workers worldwide. It builds trains, power plants and manufactures medical and telecommunications equipment.
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