Siemens to sue former directors

Siemens is claiming damages from 11 former executives for alleged breaches of their organisational and supervisory duties.

Siemens is claiming damages from 11 former executives for alleged breaches of their organisational and supervisory duties.

The move is a sequel to fines imposed by a Munich court that found the company had maintained illegal business practices and bribery to win international contracts.

In October last year the Munich district court fined Siemens £160m for bribing public officials in Russia, Nigeria and Libya in 77 cases between 2001 and 2004 to win telecommunications contracts.

Siemens' supervisory board voted yesterday to seek damages from 11 former members of the corporate executive committee of the managing board. They include former CEO Heinrich von Pierer. It will also seek damages from another board member for payments to a third party, Wilhelm Schelsky, and his companies.

This week the court sentenced former Siemens telecommunications salesman Reinhardt Siekacezek to a two-year suspended sentence plus an £85,000 fine for channelling £38m of a £1.1bn slush fund to win contracts. The bribery scandal is the worst in the company's 160-year history,

Siekacezek's sentence may not be the only one. The Financial Times reported a spokesman for the prosecution saying two other charges will be announced within three months.

The court found Siekacezek guilty on 49 counts of breach of trust, having laundered almost £38m through an "arcane network of sham companies" to win contracts.

Judge Peter Noll said top management at Siemens maintained a system in which "organised irresponsibility" was possible and even allowed to happen. Siemens said earlier it had used some £1.1bn in slush funds to win contracts.




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