KPMG Fertig Re: Siemens

It looks like the light at the end of the tunnel is an approaching train…

But why is Debevoise just now announcing that they are formally including KPMG in the investigation? Haven’t I been talking about this for a while?

Bribe scandal highlights KPMG auditing role
The role of KPMG, the auditor at Siemens is coming under scrutiny, after illicit payments of ¿1.5bn (£1bn) made by the German group were allegedly uncovered by investigators.

Debevoise, the firm of independent US lawyers appointed by the Siemens supervisory board to investigate bribes paid by the company, reported back last week. According to the German publication Sueddeutsche Zeitung, they have uncovered E1.2bn of bribes paid by the Siemens telecommunications business between 1995 and 2006 and a further E300m of illicit payments made by its power generation arm.

Now Debevoise is set to look into the role of KPMG, according to sources close to Siemens. The supervisory board wants to know why the apparent bribes were not noticed by KPMG given their scale over many years…

This scandal just gets worse and worse. Part of the reason is that Siemens just does not get it. Even with all the scrutiny and bad press, they make changes that are just more of the same.

Compliance a ‘priority’ for Siemens chief
Published: Jul 06, 2007 Peter Löscher yesterday said he would make compliance and a review of Siemens’ overly complex structure his top priorities as chief executive of Europe’s largest engineering group.

Speaking in public for the first time since taking office on Monday, the Austrian-born manager said he would soon appoint “an internationally experienced professional from outside” to replace Siemens the recently departed chief compliance officer.

Daniel Noa, who had led Siemens’ compliance department since the beginning of the year, resigned last week, hinting at widespread internal resistance to investigating the bribery scandal that has engulfed the group since late last year.

They make a bunch of changes and seemingly appoint heavy-duty guys to head compliance and audit, but the Corporate Audit function is under the Finance function and the CFO, not reporting directly to the Board. Nothing has really changed.

From the Siemens web site September 19, 2007

Siemens is establishing a new Managing Board position for legal and compliance matters, effective October 1, 2007. A Managing Board proposal to this effect was approved by the Supervisory Board at its meeting today. Effective October 1, 2007, Peter Y. Solmssen (52) will become a member of Siemens’ Managing Board as well as the company’s General Counsel, with overall responsibility for legal and compliance issues. Effective immediately, the Managing Board has also appointed Andreas Pohlmann (49) as Chief Compliance Officer. Starting October 1, 2007, all company audit functions will be merged into the unit Corporate Finance Audit, which will be assigned to the Corporate Finance Department headed by CFO Joe Kaeser. Corporate Finance Audit will be headed by Hans Winters (38) as Chief Audit Officer.

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