The Bribery Scandal at Siemens AG
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BECG076
Case Length : 16 Pages
Period : 2006-2007
Pub Date : 2007
Teaching Note : Not Available
Organization : Siemens AG
Industry : Diversified
Countries : Germany
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
A Series of Scandals Rocks Siemens
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Slush funds to win contracts abroad
On November 15, 2006, around 30 offices and private homes related to Siemens and
its employees were raided by some 200 police officers, tax inspectors and
prosecutors in Munich, and other cities of Germany, to probe suspicions of
bribery, embezzlement of company funds and tax evasion. Five Siemens employees
were taken into custody in connection with the case...
Siemens charged for bribing employee representatives
On February 14, 2007, authorities in Nuremberg, Germany, raided several Siemens
offices following allegations that the company was involved in bribing employee
representatives to secure their support for its policies...
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Former Siemens managers convicted of bribing foreign officials
On May 14, 2007, a German court convicted two former managers of Siemens,
Andreas Kley (Kley) and Horst Vigener (Vigener), for embezzling the company
funds to bribe employees of an Italian energy company, Enel. Though they
were not accused of corruption intended for personal enrichment, both the
former employees admitted to having paid 6 million euros of Siemens funds to
managers of Enel in order to win orders for gas turbines between 1999 and
2002...
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Repercussions of the Scandals
The series of bribery allegations came in the aftermath of Siemens'sale
of its loss-making mobile handset unit in 2005, to a Taiwanese company,
BenQ. Here too, Siemens did not cover itself in glory as it was seen as
having got rid of the unit because it could not easily lay off its
employees. With BenQ eventually filing for insolvency, the ex-Siemens
workers lost their jobs, and some people felt that Siemens ought to have
foreseen this and been more responsible towards its long-time employees.
Siemens was urged to take on the responsibility of compensating the
workers, and it was forced to delay its planned hefty pay hikes for its
top management and compensate the employees who lost jobs... |
Initiatives at Siemens
After the bribery scandals were unearthed at Siemens, the company started many
initiatives to strengthen its corporate governance and compliance controls. A
law firm Debevoise & Plimpton LLP (Debevoise & Plimpton) was appointed to
conduct an independent and comprehensive investigation into the company's
compliance and control system with the help of the independent auditor for
Siemens, KPMG...
Excerpts Contd...>>
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