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An erstwhile divisional head of finance at the German engineering giant authorized kickbacks worth nearly $8 million in an attempt to secure contracts with an Italian utility.
Stephen Taub, CFO.com | US
May 14, 2007
Andreas Kley, a former finance chief for the power generation unit of German engineering giant Siemens, was found guilty of breach of trust and of bribing managers at Italian utility Enel, the Associated Pressreported. Former employee and consultant Horst Vigener was convicted of abetting bribery, according to the report.
In addition, the court reportedly ordered Siemens to forfeit 38 million euros ($51.4 million) in profits from deals with Enel.
The verdicts are the first related to a series of scandals at Siemens, the AP noted.
During the trial, the wire service reported, Kley and Vigener admitted that between 1999 and 2002, they were involved in paying kickbacks worth nearly $8 million to two officials at Enel in an attempt to secure contracts to sell gas turbines. The value of the contracts reportedly exceeded $444 million.
Kley and Vigener also reportedly testified that it was not Siemens' idea to offer bribes. According to the AP, Kley admitted he alone authorized the payment and had not consulted with top Siemens managers.
Prosecutors had reportedly sought a 3 1/2-year prison sentence for Kley and 1 1/2 years for Vigener; they received suspended sentences of two years and nine months, respectively.
According to the report, prosecutors had also asked for Siemens to pay $132.2 million rather than the $51.4 million ultimately assessed by the court. Nonetheless, Siemens stated that it would appeal.
"The company maintains that the court's order to forfeit the profits from two orders placed by Enel with Siemens Power Generation Group for the supply of power plant equipment in 2000 and 2001 is illegal," Siemens maintained, in a statement. "The court's decision has no basis in law or in fact."