Siemens 2007 Annual Report Download - page 279

Notes to Consolidated Financial Statements 279
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
29 Legal Proceedings
Public prosecutors and other government authorities in jurisdictions around the
world are conducting investigations of Siemens AG and its consolidated subsidiar-
ies (hereinafter “Siemens” or the “Company” shall refer to Siemens AG and, unless
the context otherwise requires, to its consolidated subsidiaries) and certain of its
current and former employees regarding allegations of public corruption, includ-
ing criminal breaches of fi duciary duty including embezzlement, as well as brib-
ery, money laundering and tax evasion, among others. These investigations
involve allegations of corruption at a number of Siemens’ business Groups.
The Munich public prosecutor continues to conduct an investigation of certain
current and former employees of the Company on suspicion of criminal breaches
of fi duciary duty including embezzlement, as well as bribery and tax evasion. To
date, the Munich prosecutor has conducted searches of Company premises and
private homes and several arrest warrants have been issued for current and for-
mer employees, including former members of senior management, who are or
were associated with the former Com Group and the Company. In addition, the
Munich prosecutor has recently sought and received information from two Ger-
man subsidiaries of the Company in connection with an investigation of allega-
tions of criminal breach of fi duciary duty against a former employee and
unnamed others.
On October 4, 2007, pursuant to the application of the Munich prosecutor, the
Munich district court imposed a fi ne of €201 on Siemens. According to the court’s
decision, a former manager of the former Com Group committed bribery of for-
eign public offi cials in Russia, Nigeria and Libya in 77 cases during the period
from 2001 to 2004 for the purpose of obtaining contracts on behalf of the Com-
pany, whereby he acted in concert with others. In determining the fi ne, the court
based its decision on unlawfully obtained economic advantages in the amount of
at least €200 which the court determined the Company had derived from illegal
acts of the former employee, to which an additional fi ne in the amount of €1 was
added.
The decision of the Munich district court and the settlement (tatsächliche Ver-
ständigung) entered into the same day with the German tax authorities, conclude
the German investigations into illegal conduct and tax violations only as they
relate to Siemens AG and only as to the former Com Group.
As previously reported, there are ongoing investigations in Switzerland, Italy,
and Greece. These investigations relate to allegations that certain current and for-
mer employees of the former Com Group opened slush fund accounts abroad and
operated a system to misappropriate funds from the Company and, specifi cally,
that these individuals siphoned off money from Com via off-shore companies and
their own account in Switzerland and Liechtenstein. The Company has learned
that Liechtenstein prosecutors have transferred their investigation to Swiss and
Munich prosecutors.
As previously reported, Milan and Darmstadt prosecutors have been investi-
gating allegations that former Siemens employees provided improper benefi ts to
former employees of Enel in connection with Enel contracts. In Italy, legal pro-
ceedings against two former employees ended when the “patteggiamento” (plea