Siemens AG said yesterday it plans to sue two former CEOs and nine other former executives for alleged supervisory failings in a corruption scandal that has cost the company millions in fines and damaged its reputation.
Siemens’ supervisory board decided to seek damages from former chief executive Heinrich von Pierer and his successor, Klaus Kleinfeld, now the chief executive of Alcoa Inc, and others, the industrial conglomerate said in a statement.
It did not specify how much money it would demand.
Siemens said it based its claim for damages on “breaches of their organizational and supervisory duties” relating to illegal business practices and extensive bribery between 2003 and 2006, practices now placing a substantial financial burden on the company.
The company said the 11 former board members “will be given an opportunity to state their positions on the accusations before legal action for damages is taken.”
Siemens has acknowledged dubious payments of up to 1.3 billion euros (US$2 billion) in the corruption case that came to light last year.
An investigation commissioned by Siemens has found evidence of violations across the company and in several countries.
Siemens, which makes everything from wind turbines to trams, agreed in October to pay a 201 million euro fine to end some legal proceedings in Germany related to the investigation.
The supervisory board acted one day after a Munich court convicted a former Siemens manager of its ICN fixed-line telephone network division of breach of trust in the first trial related to the scandal.
Prosecutors said the ex-manager, Reinhard Siekaczek, set up a complex network of shell corporations to siphon off company money over several years. They said the money was used as bribes to help secure contracts abroad by paying off would-be suppliers, government officials and potential customers.
Judge Peter Noll said it had not been possible to determine whether company executives knew about the bribes, but indicated that testimony had pointed in that direction.
Alongside von Pierer and Kleinfeld, Siemens said it would seek damages against Johannes Feldmayer; Thomas Ganswindt; Edward Krubasik; Rudi Lamprecht; Heinz-Joachim Neubuerger; Juergen Radomski; Uriel Sharef; Klaus Wucherer and Guenter Wilhelm.
Prosecutors in May opened administrative proceedings against von Pierer on suspicion of possible violation of oversight duty, which could lead to fines but not imprisonment. They stopped short of launching a criminal investigation.
Von Pierer has steadfastly denied any wrongdoing. The Siemens CEO until 2005, he then became supervisory board chairman — a post from which he stepped down last year.
Kleinfeld also stepped down as CEO last year, and was replaced by Peter Loescher.
He has never been formally accused of any wrongdoing. After the corruption allegations emerged, he hired an outside anti-corruption expert and a law firm to examine and revise the company’s anti-corruption safeguards.
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