Siemens 2007 Annual Report Download - page 165

Management’s discussion and analysis 165
Management’s discussion and analysis
in connection with the facts under investigation by the Nuremberg prosecutors.
The investigation into the allegations involving the Company’s relationship with
the former head of AUB and the AUB has also been included within the scope of
the investigation being conducted by Debevoise. In April 2007, the labor union IG
Metall lodged a criminal complaint against unknown individuals on suspicion
that the Company breached the provisions of Section 119 of the Works Council
Constitution Act by providing undue preferential support to AUB in connection
with elections of the members of the Company’s works councils.
In February 2007, an alleged holder of American Depositary Shares of the
Company fi led a derivative lawsuit with the Supreme Court of the State of New
York against certain current and former members of the Company’s Managing
and Supervisory Boards as well as against the Company as a nominal defendant,
seeking various forms of relief relating to the allegations of corruption and
related violations at Siemens. The suit is currently stayed.
The Company has engaged Debevoise, an independent external law fi rm, to
conduct an independent and comprehensive investigation to determine whether
anti-corruption regulations have been violated and to conduct an independent
and comprehensive assessment of the compliance and control systems of Siemens.
Debevoise reports directly and exclusively to the Compliance Committee of the
Supervisory Board (formerly the Audit Committee, as described below) and is
being assisted by forensic accountants from the international accounting fi rm
Deloitte & Touche. Debevoise’s investigation of allegations of corruption at the
former Com Group, the Company’s other Groups and at regional Siemens subsid-
iaries is ongoing. Information on the fi nancial impact of compliance matters is
provided below under “Financial Impact of Compliance Matters.”
We have taken a number of signifi cant steps to improve our compliance proce-
dures and internal controls in response to the allegations of corruption. We are
continuing to improve and implement our anti-corruption program and related
controls. Among the initiatives the Company has implemented or is in the process
of implementing are:
¢ The Supervisory Board of the Company has formed a Compliance Committee of
the Supervisory Board, which oversees the ongoing investigations and remedia-
tion activities of the Company. The Compliance Committee is composed of the
members of the Audit Committee of the Supervisory Board and is chaired by the
chairman of the Supervisory Board.