By CHRIS V. NICHOLSON
Two former chief executives
of the engineering giant Siemens and four other onetime officials have
agreed to pay a total of €18 million in damages resulting from a
long-running bribery scandal, company executives said Wednesday.
Thomas Lohnes/JOERG KOCH, via Agence France-Presse
— Getty Images
Heinrich von Pierer, left, and Klaus Kleinfeld,
former chief executives at Siemens, agreed to pay
damages in connection with a corruption scandal.
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Siemens last year
threatened lawsuits against 11 people it accused of supervisory failings
related to the scandal, which hurt the reputation of the company as well
as its bottom line. Siemens has paid €1.6 billion, or $2.4 billion, to
settle legal actions in Europe and the United States, as well as €800
million in legal fees.
Siemens, based in Munich,
said Wednesday that it had reached settlements with 6 of the 11, including
the two biggest names: Heinrich von Pierer, who ran the company from 1992
to 2005; and his successor, Klaus Kleinfeld. It did not disclose the
amounts.
But an official at the
company said the settlement amounted to about half of each of the former
executives’ net assets. Mr. von Pierer will pay €5 million, said the
official, who asked not to be identified because of company policy.
Mr. Kleinfeld, who now
runs Alcoa, will pay €2 million, the official said. Uriel Sharef has
agreed to pay €4 million; Jürgen Radomski and Johannes Feldmayer, €3
million each; and Karl-Hermann Baumann, €1 million. All are former board
members.
Settlements with three
other executives were previously announced, while claims against two
others are pending because they are still under investigation by
prosecutors.
The scandal surfaced in
2006, as investigators uncovered evidence of bribery and kickbacks in more
than a dozen countries where Siemens operated and bid for contracts. By
the middle of 2007, Mr. von Pierer and Mr. Kleinfeld had resigned, though
the dispute over who was responsible rolled on. Both have denied
wrongdoing.
Paying bribes abroad
became a crime in Germany in the late 1990s.
While Siemens sought to
portray the latest settlements as a milestone, anticorruption campaigners
were less satisfied.
“I think it’s too low,
compared to the damage,” said Peter Fries, a lawyer with Transparency
International.
The two ex-board members
still being investigated are Thomas Ganswindt and Heinz-Joachim Neubürger,
a former chief financial officer. In the absence of a settlement soon,
Siemens is likely to file a civil lawsuit before the annual general
meeting scheduled for Jan. 26, the Siemens official said. Shareholders
will vote on the settlements at that meeting.
While the settlements with
the six executives preclude litigation from Siemens, they do not end
inquiries by state prosecutors.
Barbara Stockinger, a
spokeswoman for the Munich prosecutors’ office, said that eight
investigations were still in progress. She confirmed that these included
cases against Mr. Ganswindt, Mr. Neubürger and Mr. Sharef; in five other
cases, she declined to identify the individuals. She said, however, that
of the six executives whose settlements were announced Wednesday, not all
were under investigation.
Andreas Wirth, a lawyer
for Mr. Ganswindt, said that even if Siemens filed litigation against his
client, an agreement was still possible.
“We have come close
already,” he said, “and we expect to settle.”