Former Siemens chief will not face corruption charges

Former Siemens chief will not face corruption charges
Von Pierer on the phone in Berlin in 2006. Photo: DPA
Heinrich von Pierer, former Siemens chief and supervisory board president, will not face penal charges in connection with a vast corruption scandal at the German engineering giant, prosecutors in southern Munich said in a statement on Friday.

The statement said prosecutors did not have evidence to justify penal charges against the former head of Siemens, which is being probed for business practices that allegedly involved paying bribes to obtain foreign contracts.

Von Pierer could however be called to answer in a procedure that would not result in a trial or prison sentence.

If found to have failed in his duties, he might have to pay a fine.

An internal Siemens probe has found that almost all its sectors of activity were subject to active corruption, the group said on April 29.

The international law firm of Debevoise & Plimpton “has found evidence in each of the examined groups and in various countries indicating that domestic as well as foreign compliance regulations have been violated,” it said.

“The violations in question reflect not only outright incidents of corruption, but, in many cases, violations of regulations pertaining to internal controls,” the enquiry found.

Siemens employs about 400,000 people around the world and makes a broad range of products including household appliances, medical equipment, trains, turbines and power stations.

Von Pierer ran the group for 13 years before he became supervisory board president in 2005.

Siemens has acknowledged the existence of special funds worth €1.3 billion ($2 billion) used to obtain foreign contracts and agreed in October to pay a fine of €201 million to put an end to some German legal proceedings.

A separate investigation is being carried out by the US Securities and Exchange Commission (SEC) because Siemens shares are traded in New York.

A report last month in the Süddeutsche Zeitung newspaper said German prosecutors were investigating 270 suspects as the corruption probe took on a fully international dimension.

The newspaper said that overseas business figures had allegedly colluded with Siemens to deposit large cash floats in Switzerland, Dubai and other financial havens for use as hidden sweetener payments to secure large foreign contracts.

A Siemens executive has alleged to prosecutors that von Pierer ordered him and a colleague in 2002 and 2003 to make suspicious payments of about $10 million in connection with a large order from the Argentine government.