Siemens 2007 Annual Report Download - page 172

172 Management’s discussion and analysis
The Company also became aware of additional bank accounts and cash funds
at various locations that were not previously recorded in the Company’s balance
sheet and is currently investigating whether Siemens is the economic owner of the
funds. Certain funds have been frozen by authorities. Approximately €11 million
was recorded in the Company’s consolidated balance sheets for fi scal 2007, mostly
relating to funds paid back by a former offi cer in January 2007 and funds received
from a trust account in October and November 2007.
The Company remains subject to corruption-related investigations in the U.S.
and other jurisdictions around the world. As a result, additional criminal or civil
sanctions could be brought against the Company itself or against certain of its
employees in connection with possible violations of law, including the FCPA. In
addition, the scope of pending investigations may be expanded and new investiga-
tions commenced in connection with allegations of bribery and other illegal acts.
The Company’s operating activities, fi nancial results and reputation may also be
negatively affected, particularly due to imposed penalties, disgorgements, com-
pensatory damages, the formal or informal exclusion from public procurement
contracts or the loss of business licenses or permits. In addition to the amounts
mentioned above as well as the fi ne imposed by the Munich district court as men-
tioned in the “Notes to Consolidated Financial Statements” as well as under “Legal
Proceedings”, no material charges or provisions for any such penalties or dam-
ages have been accrued as management does not yet have enough information to
reliably estimate such amounts. We expect that we will need to record expenses
and provisions in the future for fi nes, penalties or other charges, which could be
material, in connection with the investigations. We will also have to bear the costs
of continuing investigations and related legal proceedings, as well as the costs of
on-going remediation efforts. Furthermore, changes affecting the Company’s
course of business or changes to its compliance programs beyond those already
taken may turn out to be required.
Fiscal 2007 included a total of €347 million in expenses for outside advisors
engaged by Siemens in connection with the investigations into alleged violations
of anti-corruption laws and related matters as well as remediation activities.