Siemens over the weekend pointed another finger at its former chairman and CEO, Heinrich von Pierer, as the massive engineering and automation company continues an internal probe of corporate wrongdoing while facing a series of international bribery charges.
In the latest salvo, Siemens raised suspicions about von Pierer in his former role as chairman of Siemens’ supervisory board, an independent group that oversees the company’s management. The allegations differ from those Siemens raised two months ago against von Pierer in his capacity as CEO, a job he held from 1992 until 2005.
In both instances, the suspicions — which Siemens has not yet pursued as formal charges or lawsuits — question von Pierer’s role in the bribes-for-contracts scandal that has so far cost Siemens € 1.4 billion.
Late on Friday, Siemens’ managing board released a statement alleging that von Pierer, while serving as chairman of Siemens’ supervisory board from 2005 through 2007, withheld information from that board about the company’s compliance practices. The statement also implicates Karl-Hermann Baumann, who preceded von Pierer as supervisory board chairman from 1998 to 2005.
Siemens based its claims on findings by law firm Schilling, Zutt & Anschütz, which investigated possible breaches of duty by the supervisory board between 2003 and 2006, according to the statement. Schilling concluded that the two former chairmen had learned important compliance facts while meeting with Siemens’ management, but did not pass that information on to the supervisory board during meetings.
“After a review of the available facts, the law firm advised that there was evidence that Heinrich von Pierer and Karl-Hermann Baumann breached their supervisory duties as members of the supervisory board,” Siemens’ managing board said in the statement. The managing board includes current Siemens CEO Peter Loscher, Siemens Industry Sector CEO Heinrich Hiesinger, and six other top Siemens executives.
A Siemens spokesman said in an interview that Siemens has notified von Pierer and Baumann, who may now get in touch with Siemens to discuss possible resolutions. Those could range from Siemens’ dropping allegations to its suing, or to a mutually agreed-upon settlement, the spokesman said. The same alternatives apply to allegations Siemens’ current supervisory board raised in July against von Pierer and former CEO Klaus Kleinfeld of poor oversight during their respective tenures as CEO.
Siemens is under pressure from shareholders to seek damages from executives responsible for the bribery in order to help pay for the scandal. The € 1.4 billion incurred to date includes professional fees for lawyers and advisers, implementation of new compliance processes, and € 621 million in fines paid in various countries. Siemens still awaits word of possible penalties in the United States, where both the Securities and Exchange Commission and the Department of Justice are investigating.
The Schilling, Zutt & Anschütz report cleared all other supervisory board members of wrongdoing during the three-year period, including current Chairman Gerhard Cromme.
“The managing board of Siemens AG has concluded that all members — with the exception of the two chairmen of the supervisory board during the period in question, Prof. Dr. Heinrich v. Pierer and Dr. Karl-Hermann Baumann — performed their duties properly and appropriately,” the Siemens statement said.