Siemens 2007 Annual Report Download - page 281

Notes to Consolidated Financial Statements 281
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
As previously reported, the U.S. Department of Justice (DOJ) is conducting an
investigation of possible criminal violations of U.S. law by Siemens in connection
with the matters described above and other allegations of corruption. During the
second quarter of fi scal 2007, Siemens was advised that the U.S. Securities and
Exchange Commission’s (SEC) enforcement division had converted its informal
inquiry into these matters into a formal investigation. The Company is cooperat-
ing with these investigations.
The SEC and the DOJ are also investigating possible violations of U.S. law by
Siemens in connection with the Oil-for-Food Program. The Company is cooperat-
ing with the SEC and DOJ. A French investigating magistrate commenced a prelim-
inary investigation regarding the participation of French companies, including
Siemens France S.A.S., in the Oil-for-Food Program. German prosecutors also
began an investigation in this matter and conducted searches of Company prem-
ises and private homes in Erlangen and Berlin in August 2007. Siemens is cooper-
ating with the authorities in France and Germany.
As a result of the above described matters and as a part of its policy of coopera-
tion, Siemens contacted the World Bank and offered to assist the World Bank in
any matter that might be of interest to the World Bank. Since that time, Siemens
has been in contact with the World Bank Department of Institutional Integrity and
intends to continue its policy of cooperation.
In February 2007, the Company announced that public prosecutors in Nurem-
berg are conducting an investigation of certain current and former employees of
the Company on suspicion of criminal breach of fi duciary duties against Siemens,
tax evasion and a violation of the German Works Council Constitution Act
(Be triebs verfassungsgesetz). The investigation relates to an agreement entered
into by Siemens with an entity controlled by the former head of the independent
employee association AUB (Arbeitsgemeinschaft Unabhängiger Betriebsangehöri-
ger). The prosecutors are investigating payments made during the period 2001 to
2006 for which Siemens may not have received commensurate services in return.
The former head of AUB was arrested in February 2007. Since February, searches
have been conducted at several Siemens AG premises and private homes and an
arrest warrant was issued for a member of the Managing Board, in connection
with this investigation, who was taken into custody. This executive’s term has
expired and he therefore is no longer a member of the Managing Board. In addi-
tion to this former member of the Managing Board, other current and former
members of the Company’s senior management have been named as suspects in
this matter. In April 2007, the former member of the Managing Board posted bail
in the amount of €5 and was released from custody. In this connection, a bank
issued a bond (Bankbürgschaft) in the amount of €5, €4.5 of which was guaranteed
by the Company pursuant to provisions of German law. The former member of the
Managing Board has provided the Company a personal undertaking to cooperate
with and fully support the independent investigation conducted by Debevoise &
Plimpton LLP (Debevoise), as described below, and to repay all costs incurred and
payments made by the Company in connection with the bank guarantee in the
event he is found to have violated his obligations to the Company in connection
with the facts under investigation by the Nuremberg prosecutors. The investiga-