The Wall Street Journal-20080117-Probe May Tie Top Siemens Executives to Scandal
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Probe May Tie Top Siemens Executives to Scandal
The U.S. law firm hired by Siemens AG to investigate a massive bribery scandal at the German conglomerate said it has developed "very substantial leads" on the possible involvement of top company executives.
Debevoise & Plimpton LLP didn't name any names or indicate whether the people at issue were current or former executives. Still, yesterday's broad disclosure raises questions about some veteran Siemens executives who survived a recent board overhaul. It also heightens the prospect of further upheaval at Europe's largest engineering company.
Siemens, based in Munich, Germany, has flagged 1.3 billion euros ($1.9 billion) in suspicious transactions between 2000 and 2006. It is being investigated on several continents for alleged bribes-for- business schemes, triggering last year's resignations of the chief executive and supervisory-board chairman.
In a letter yesterday to the current supervisory-board chairman that Siemens made public before a vote on company management, Debevoise stated it had "obtained significant new information" since late November in its investigation. Some of the information involves "the conduct and knowledge of a number of individuals who have served on the managing board during the past several years," the law firm added.
Siemens' managing board is composed of executives who oversee day- to-day operations. Its supervisory board is similar to a U.S. company's board of directors.
Siemens said it will recommend at next week's annual shareholder meeting that shareholders postpone voting to approve the actions of managing board members for the fiscal year ended Sept. 30, 2007. It also will recommend that shareholders postpone approving the actions of Heinrich von Pierer, who resigned as supervisory board chairman last April and has left the company. The votes, while largely symbolic, indicate shareholders's views of management.
The recommendations don't apply to current Chief Executive Peter Loescher, who joined Siemens in July, and three other executives who joined the management board after September. But they do apply to four current board members, including Chief Financial Officer Joe Kaeser, who began serving before October.
Siemens also wants to postpone approval votes for seven former management-board members who stepped down during the course of last year. That includes Klaus Kleinfeld, the former chief executive who joined Alcoa Inc. as president and chief operating officer last autumn.
Messrs. von Pierer, Kaeser, Kleinfeld and several other current and former top Siemens executives have denied any wrongdoing. Two former management-board members were briefly jailed in late 2006 and early 2007 by German authorities, who also have named another former board member as a suspect in criminal investigations.
Mr. Loescher has vowed to get to the bottom of bribery allegations and give Siemens a fresh start. In recent weeks, he pushed through plans to collapse the company's nine business units into three and replaced several top executives.
But the former Merck & Co. executive also has stumbled upon minefields as he tries to balance outsiders with insiders who understand Siemens's myriad businesses. Last month, Mr. Loescher revoked the appointment of a veteran Siemens executive to oversee finances at the company's biggest unit just one week after naming him to the position. Siemens cited uncertainty over the executive's role in a criminal investigation.
Debevoise said it is chasing leads generated by a Siemens amnesty program.
