Siemens 2007 Annual Report Download - page 163

Management’s discussion and analysis 163
Management’s discussion and analysis
ceedings against two former employees ended when the “patteggiamento” (plea
bargaining procedure without the admission of guilt or responsibility) by the
charged employees and Siemens AG entered into force in November 2006.
Prosecutors in Darmstadt brought charges against two other former employees
not covered by the “patteggiamento”. In May 2007, the Regional Court of Darmstadt
sentenced one former employee to two years in prison, suspended on probation,
on counts of commercial bribery and embezzlement. Another former employee
was sentenced to nine months in prison, suspended on probation, on counts of
aiding and abetting commercial bribery. In connection with these sentences,
Siemens AG was ordered to disgorge €38 million of profi ts. The prosecutors and
both defendants have appealed the decision of the Regional Court of Darmstadt.
Siemens AG has also appealed the decision with respect to the disgorgement.
As previously reported, in 2004 the public prosecutor in Wuppertal initiated an
investigation against Siemens employees regarding allegations that they partici-
pated in bribery related to the awarding of an EU contract for the refurbishment of
a power plant in Serbia in 2002. In August 2007, the public prosecutor conducted
searches of the premises of the PG Group in Erlangen, Offenbach and Karlsruhe in
relation to this investigation. The investigation is ongoing.
In addition, there is a signifi cant number of ongoing investigations into allega-
tions of public corruption involving the Company, certain of our current and for-
mer employees or projects in which the Company is involved in a number of juris-
dictions around the world, including China, Hungary, Indonesia, Israel, Italy,
Nigeria, Norway and Russia, among others. Specifi c examples include the follow-
ing:
¢ There are currently numerous public corruption-related governmental investi-
gations in China, involving several divisions of Siemens Ltd. China, primarily
Med, but also A&D and SIS. The investigations have been initiated by prosecutors
in several regions and provinces, including Guangdong, Jilin, Xi´an, Wuxi,
Shanghai, Ting Hu, Shandong, Hunan, and Guiyang.
¢ Siemens Zrt. Hungary and certain of its employees are being investigated by
Hungarian authorities in connection with allegations concerning suspicious
payments in connection with consulting agreements with a variety of shell cor-
porations and bribery relating to the awarding of a contract for the delivery of
communication equipment to the Hungarian Armed Forces.
¢ The public prosecutor in Kalimantan Province, Indonesia, has charged the head
of the Med division of Siemens PT Indonesia in connection with allegations that
he participated in bribery, fraud, and overcharging related to the awarding of a
contract for the delivery of medical equipment to a hospital in 2003.
¢ Authorities in Nigeria have conducted a search of Siemens premises in connec-
tion with an investigation into alleged illegal payments.
¢ The Norwegian government is investigating allegations of bribery and over-
charging of the Norwegian Department of Defense related to the awarding of a
contract for the delivery of communication equipment in 2001.
¢ The public prosecutor in Milan is investigating allegations as to whether two
employees of Siemens S.p.A. made illegal payments to employees of the state-
owned gas and power group ENI.