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Siemens Criminal Trial on Corruption Begins

The first criminal trial in a mammoth bribery probe at German engineering giant Siemens began on Monday and the prosecutor warned that it should send a signal to corporations that corruption would not be tolerated.

In a case that may reveal the scale of a suspected bribery network already put at more than 1 billion euros ($1.6 billion), by Siemens, Reinhardt Siekaczek is accused of building a system of slush funds and front firms to hide illegal money transfers.

After a year and a half of investigations into suspected bribes that were at first said to amount to just 20 million euros, Senior Public Prosecutor Anton Winkler said on Monday the trial should send a clear message to other companies.

"We hope it will bring a new awareness in corporate culture that bribery will not be tolerated, either in Germany or abroad," he said before the start of the trial in Munich's Higher Regional Court.

The affair has shaken Siemens, Europe's biggest engineering group, and led to the resignations of former Chief Executive Klaus Kleinfeld last year and also of ex-CEO and chairman Heinrich von Pierer, who will appear as a witness.

The company's conduct is also being investigated by the U.S. Department of Justice and Securities and Exchange Commission, among other foreign authorities, and could lead to Siemens being banned from bidding for certain U.S. contracts.

Munich prosecutors are investigating almost 300 suspects in their probe, which has generated 5 terabytes -- or more than 5 million A4 sheets -- of information.

Siekaczek, 57, a grey-haired, bespectacled ex-manager at Siemens' former telecoms equipment division, listened impassively as the charges were read out at the start of the trial, after confirming his name and date of birth.

Siekaczek spent almost four decades working at Siemens and has already admitted that he set up slush funds for bribes in 1999 or 2000.

He has said he knew of bribery schemes earlier this decade in more than a dozen countries.

He is not accused of personally enriching himself through the scams but faces a jail sentence of up to five years for each of the 58 cases of breach of trust of which he is accused.