U.S. DoJ, SEC Probe Possible Siemens Violations

A corruption affair that has shaken German industrial conglomerate Siemens has spread to the United States with investigations by the U.S. Department of Justice and Securities and Exchange Commission.

"The U.S. Department of Justice is conducting an investigation of possible criminal violations of U.S. law by Siemens in connection with these matters," Siemens said in its first-quarter financial report posted on its Website (www.siemens.com).

"Siemens understands that the U.S. Securities and Exchange Commission's enforcement division is conducting an informal inquiry into the matters at this time," it added in the notes to its consolidated financial statements for the quarter to the end of December.

Siemens shares were down 0.6% to 84.65 euros, underperforming a flat German blue-chip DAX index.

German prosecutors are investigating 200 million euros ($260 million) missing from Siemens's accounts that it suspects were transferred into foreign accounts and used as slush funds for bribes to win telecoms equipment contracts.

Siemens also is conducting its own internal investigation into 420 million euros of dubious payments that were booked as consultancy fees over a seven-year period.

Informal SEC inquiries can but do not necessarily result in formal investigations, under which the watchdog gains powers to subpoena documents and other information from a company.

Siemens said its business could be hurt by the investigations and that it had not made any provisions for any possible future penalties that could be imposed on it.

"The company's operating activities may also be negatively affected due to imposed penalties, compensatory damages or due to the exclusion from public procurement contracts," it said.

"No charges or provisions for any such penalties or damages have been accrued as management does not yet have enough information to reasonably estimate such amounts."

Siemens added that the Munich prosecutor's investigation had led to related probes in Liechtenstein and Switzerland.

Greek prosecutors were also investigating one of Siemens's former officers there, it said, and had questioned the chief executive of Siemens Greece and another employee as witnesses.