Recent news has highlighted that the former CFO of Siemens, Heinz-Joachim Neubürger who stepped down from Siemens sometime between March and May (accounts differ), is now named as a suspect in the scandal.
By Richard Milne in Frankfurt for the Financial Times
Published: January 11 2007 20:07
“The investigation into the €420m bribery scandal at Siemens reached the highest level yet on Thursday as the company’s former chief financial officer was named as a suspect. The investigation of Heinz-Joachim Neubürger, who stepped down in April after being passed over as chief executive of Europe’s largest engineering group, came as the current head of Siemens, Klaus Kleinfeld, warned that the probe threatened the company’s survival.”
I wrote a blog entry a couple of weeks ago about the recent phenomenon of companies being less circumspect when executives step down these days when that executive may be a source of trouble for the firm in the future. Companies are also being more blunt about their service providers, as Vitesse was about firing KPMG after they decided to sue them. However, in this case, if Siemens knew that Neubürger may be a suspect, they were still allowing the genteel European ways to prevail in their press releases and comments to the press.
By Patrick Jenkins in Frankfurt, FT.com sitePublished: Mar 22, 2006
“The respected finance chief of German engineering heavyweight Siemens resigned unexpectedly on Wednesday, depriving the group of a key guiding force behind its huge conglomerate structure. Heinz-Joachim Neubürger, 53, had more than a year to run on his contract but said on Wednesday he was going early “for personal reasons”. People close to him said that after eight years in the job, and two years after a split from his wife, he wanted to rebuild his personal life.
Debevoise had not yet hired Deloitte, but they knew deep down that at some very early point, KPMG would probably have to become independent of the investigation. It would be very uncomfortable if it was found, for example, that Neubürger or others had not withheld information or lied to KPMG but that KPMG personnel could instead be construed as negligent or, at worst, complicit in the illegal activities. Déjà vu re: Vitesse all over again…
Debevoise and Deloitte to start their work at Siemens, from the Siemens website
Head of Audit Committee is fully supporting the investigations
Munich, Dec 22, 2006 (Only eleven days later…)
“Debevoise & Plimpton LLP – the law firm retained by the Audit Committee of the Supervisory Board of Siemens AG in connection with current investigations by the Munich Department of Public Prosecution – has already begun their work. They will be assisted by forensic accountants from the international organization Deloitte Touche Tomahtsu. Both companies have committed large and experienced teams to this investigation. Dr. Gerhard Cromme, Chairman of the Siemens Audit Committee, …reiterated that the Audit Committee has mandated Debevoise as the independent counsel to conduct an independent and comprehensive investigation to determine whether anti-corruption regulations have been violated and to conduct an independent and comprehensive assessment of the compliance and control systems of Siemens. He further stated that the independent quality of this investigation is very important. Debevoise will report exclusively to the Audit Committee.”
An interesting corporate governance blog writer uses the Siemens case as an example of bribery gone wild and predicts a deeper, wider scandal.