Siemens 2008 Annual Report Download - page 278

182 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
Civil litigation
In February 2007, an alleged holder of Siemens AG American Depositary Shares led a derivative lawsuit with
the Supreme Court of the State of New York against certain current and former members of Siemens AG’s
Managing and Supervisory Boards as well as against Siemens AG 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.
In July 2008, OTE led a lawsuit against Siemens AG in the district court of Munich, Germany seeking to compel
Siemens to disclose the outcome of its internal investigations with respect to OTE. OTE seeks to obtain informa-
tion with respect to allegations of undue inuence and/or acts of bribery in connection with contracts concluded
with OTE from 1992 to 2006. On September 25, 2008, Siemens was served with the complaint by the district
court.
The Company has become aware of media reports that in June 2008 the Republic of Iraq led an action request-
ing unspecied damages against 93 named defendants with the United States District Court for the Southern
District of New York on the basis of ndings made in the IIC Report. Siemens S.A.S France, Siemens A.Ş. Turkey
and OSRAM Middle East FZE, Dubai are reported to be among the 93 named defendants. None of the Siemens
afliates have been served to date.
The Company remains subject to corruption-related investigations in the United States 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 investigations commenced in connection with
allegations of bribery and other illegal acts. The Company’s operating activities, nancial results and reputation
may also be negatively affected, particularly due to imposed penalties, nes, disgorgements, compensatory
damages, third-party litigation, including by competitors, the formal or informal exclusion from public procure-
ment contracts or the loss of business licenses or permits. As previously reported and as described above, the
Munich district court imposed a ne in October 2007 and the Company recorded a provision in scal 2008 in
connection with the investigations. However, no additional charges or provisions for any such penalties, nes,
disgorgements or damages have been recorded or accrued as management does not yet have enough informa-
tion to estimate such amounts reliably. The Company expects that additional expenses and provisions will need
to be recorded in the future for penalties, nes, damages or other charges, which could be material, in connec-
tion with the investigations. The Company 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 be
required, including any changes that may be mandated in connection with a resolution of the ongoing investiga-
tions.
Siemens’ response
The Company engaged Debevoise, an independent external law rm, to conduct an independent and compre-
hensive 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 and is being assisted
by forensic accountants from the international accounting rm Deloitte & Touche.