Siemens bosses lax on anti-corruption rules

Siemens ignored its own anti-corruption procedures in a slush fund scandal that has brought down a number of former group executives, Spiegel magazine, quoted by an AFP report, said.

'Netzwerk-compliance,' a network comprising more than 400 businesses created to secure good company governance, identified 'considerable structural shortcomings' in Siemens' anti-corruption rules, according to a 'strictly confidential' document by Hengeler Mueller lawyers' office for Siemens.

Hengeler Mueller pinpointed a conflict of interest in the company's auditing office tasked with preventing corruption and protecting the group if corruption cases were revealed, the magazine said.

Steps to improve the way the auditing office works also met with 'considerable opposition by management,' it added.

With its 80 members, the audit department was understaffed compared to its US competitor GE which employs 300 people in its compliance department, according to an internal 2005 study, quoted by the magazine.

Siemens said late last month it would pursue former directors for damages in an unprecedented action based on a claim they ignored widespread corruption revealed nearly two years ago.

Among the 11 executives targeted are former Siemens bosses Heinrich von Pierer and Klaus Kleinfeld, the company said in a statement.

The company 'bases its claims on breaches of their organisational and supervisory duties in view of the accusations of illegal business practices and extensive bribery' that marked operations from 2003 to 2006.

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