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105

COMPLIANCE RISKS

Public prosecutors and other government authorities in ju-

risdictions around the world are conducting investigations

of our Company and certain of our current and former em-

ployees regarding allegations of public corruption and

other illegal acts. The results of these and any future inves-

tigations may have a material adverse effect on the devel-

opment of future business opportunities, our ﬁnancial re-

sults and condition, the price of our shares and ADSs and

our reputation: Public prosecutors and other government au-

thorities in jurisdictions around the world are investigating al-

legations of corruption at a number of our former business

Groups and regional companies. In addition to ongoing inves-

tigations, there could be additional investigations launched in

the future by governmental authorities in these or other juris-

dictions and existing investigations may be expanded. As a re-

sult, governmental authorities may take action against us or

some of our employees. These actions could include further

criminal and civil ﬁnes as well as penalties, sanctions, injunc-

tions against future conduct, proﬁt disgorgements, disqualiﬁ-

cations from directly and indirectly engaging in certain types

of business, the loss of business licenses or permits or other

restrictions. In addition to monetary and other penalties, fur-

ther monitors could be appointed to review future business

practices with the goal of ensuring compliance with applicable

laws and we may otherwise be required to further modify our

business practices and compliance programs. Tax authorities

may also impose certain remedies, including potential tax pen-

alties. Depending on the development of the investigations,

we may be required to accrue material amounts for such pen-

alties, damages, proﬁt disgorgement or other possible actions

that may be taken by various governmental authorities. Any of

the foregoing could have a material adverse effect on our busi-

ness, ﬁnancial results and condition, the price of our shares

and ADSs and our reputation.

Additionally, we engage in a substantial amount of business

with governments and government-owned enterprises around

the world. We also participate in a number of projects funded

by government agencies and non-governmental organizations

such as multilateral development banks. If we or our subsidiar-

ies are found to have engaged in certain illegal acts or are

found not to have taken effective steps to address the allega-

tions or ﬁndings of corruption in our business, this may impair

our ability to participate in business with governments or non-

governmental organizations and may result in formal exclu-

sions from such business, which may have a material adverse

effect on our business. For example, legislation of member

states of the European Union could in certain cases result in

mandatory or discretionary exclusion from public contracts in

case of a conviction for bribery and certain other offences or

for other reasons. As described in more detail in “Notes to Con-

solidated Financial Statements,” we or our subsidiaries have in

the past been excluded from government contracting as a re-

sult of ﬁndings of corruption or other misconduct. Conviction

for illegal behavior or exclusion from participating in contract-

ing with governments or non-governmental organizations in

one jurisdiction may lead to exclusion in other jurisdictions or

by other non-governmental organizations. Even if we are not

formally excluded from participating in government business,

government agencies or non-governmental organizations

may informally exclude us from tendering for or participating

in certain contracts. From time to time, we have received re-

quests for information from government customers and non-

governmental organizations regarding the investigations de-

scribed above and our response to those investigations. We

expect to receive more such requests in the future.

In addition, our involvement in existing and potential corrup-

tion proceedings could damage our reputation and have an

adverse impact on our ability to compete for business from

both public and private sector customers. The investigations

could also impair our relationship with business partners on

whom we depend and our ability to obtain new business part-

ners. They may also adversely affect our ability to pursue stra-

tegic projects and transactions which could be important to

our business, such as strategic alliances, joint ventures or

other business combinations. Current or possible future inves-

tigations could result in the cancellation of certain of our exist-

ing contracts, and the commencement of signiﬁcant third-

party litigation, including by our competitors.

Many of the governmental investigations are at this time still

ongoing and we cannot predict when they will be completed or

what their outcome will be, including the potential effect that

 Managing Board statements, Independent auditors’ report, Additional information