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Siemens Announces ?1 Billion Reserve

Siemens AG said yesterday that it has reserved ?1 billion in fiscal 2008 "in connection with the settlement being sought by the company and with authorities in Germany and the United States." The short statement also said, "This current estimate is based on the status of ongoing discussions being held between the company and authorities in Germany and the U.S. The company will make no further comments on the ongoing proceedings."

The statement is available here.

The amount of the reserve for a possible settlement with U.S. authorities is lower than expected.

Siemens has admitted that at least ?1.3 billion was spent on questionable payments around the globe. In addition to Germany and the U.S., the company faces corruption investigations in Switzerland, Italy, Greece, China, Hungary, Russia, Norway, and Indonesia.

Earlier this year, Siemens said it plans to sue nearly a dozen former executives, including two former chief executives, for failing to prevent the corrupt practices at the company. It also agreed last year to pay a fine in German proceedings of ?201 million.

Siemens had hoped to settle the U.S. proceedings in late 2007. Settlement then was apparently derailed when the company discovered that the scope of the global corruption was more extensive than it originally reported and on which the German settlement was based.

View our prior posts about Siemens here.

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Full post as published by The FCPA Blog on November 06, 2008 (boomark / email).