Siemens 2008 Annual Report Download - page 279

Notes to Consolidated Financial Statements 183
(in millions of €, except where otherwise stated and per share amounts)
In July 2008, the Supervisory Board of Siemens AG resolved to claim damages from former members of the for-
mer Corporate Executive Committee of the Managing Board of Siemens AG. The claims are based on breaches of
their organizational and supervisory duties in view of the accusations of illegal business practices and extensive
bribery that occurred in the course of international business transactions and the resulting nancial burdens to
the Company. Claims are being asserted against ten former executives, including two former Chief Executive
Ofcers of Siemens and a former Chief Financial Ofcer. Claims for damages are also being brought against one
of the aforementioned ten former executives and one additional former member of the Managing Board in con-
nection with payments made to the former head of the independent employee association AUB (Arbeitsgemein-
schaft Unabhängiger Betriebsangehöriger). The former executives have been invited to respond to the claims
before legal action for damages is taken. In addition, in September 2008, two former chairmen of the Supervi-
sory Board, one of whom is also a former CEO and referred to above, have been invited to respond to allegations
that they had breached their supervisory duties, before the Company considers further steps and the possible
enforcement of damage claims against them.
As previously reported, during scal year 2007, the Company conducted an analysis of the impact on the Com-
pany’s nancial statements of issues raised by allegations of violations of anti-corruption legislation. Please
refer to Notes to the Consolidated Financial Statements for scal year ended September 30, 2007. During scal
year 2008, Debevoise has identied and reported to the Company evidence of payments to business consultants,
sales-related intermediaries and cash payments. The Company has analyzed whether such payments were con-
sidered in its analysis of income tax non-deductible payments conducted in scal 2007 and identied no addi-
tional income tax impact from such payments. The Company is also analyzing certain inter-company transac-
tions identied by Debevoise and does not expect a signicant impact on its consolidated nancial statements
from these transactions.
As previously reported, the Company also investigates evidence of additional bank accounts at various locations.
The Company is investigating the amount of the funds, as well as whether such funds can be recorded on the
Company's balance sheet. Certain funds have been frozen by authorities. Approximately €11 was recorded in the
Company’s consolidated balance sheet for scal 2007, mostly relating to funds paid back by a former ofcer in
January 2007 and funds received from a trust account in October and November 2007. In October 2008, the
Company recovered additional funds in immaterial amounts from certain such accounts.
The Company has implemented a number of remediation measures to improve the compliance procedures and
internal controls and is committed to continuing to diligently and vigorously review its anti-corruption controls
and processes.
Antitrust proceedings
The Company is the subject of antitrust investigations and proceedings in a number of jurisdictions around the
world. Specic examples are described below.
A Mexican governmental control authority barred Siemens Mexico from bidding on public contracts for a period
of three years and nine months beginning November 30, 2005. This proceeding arose from allegations that
Siemens Mexico did not disclose alleged minor tax discrepancies when it was signing a public contract in 2002.
Upon appeal by Siemens Mexico, the execution of the debarment was stayed on December 13, 2005 and subse-
quently reduced to a period of four months. Upon further appeal, the execution of the reduced debarment was
stayed by the competent Mexican court in April 2006. A nal decision on the appeal has not yet been announced.