Siemens pays over €1 billion in corruption fines

German engineering giant Siemens is to pay fines totalling over €1 billion to settle two long-running corruption court cases.

In the US, the company will pay €350 million to the Department of Justice in order to settle charges of bribery and false accounting, and €350 million to the Securities Exchange Commission.

In Munich, where the company’s headquarters are located, it has agreed to pay €395 million to settle a case accusing the board of failing to fulfil its supervisory obligations.

The company was accused of setting up a €1.3 billion bribe fund in order to win contracts, a charge to which Siemens’ lawyers have submitted a guilty plea.

The fines bring the total cost to Siemens of the corruption scandal to €2.5 billion. This week’s fines, although gargantuan, in fact represent something of a victory for the company’s current management. They had feared that the scandal could have cost it as much as $5 billion (€3.6 billion).

"The corruption cases in Germany and the US are now over,” said Siemens president Gerhard Cromme yesterday. “Today marks the end of an unprecedented two-year effort to resolve extremely serious matters."

Siemens is part-owner of computer manufacturer and IT services provider Fujitsu-Siemens, as well as an IT service provider in its own right. It also builds telecommunications systems for both carriers and corporate customers.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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