Siemens scandal could bring huge fines
After allegations of corruption at electronics giant Siemens surfaced 18 months ago, the company hired a law firm to investigate them. Interim results don't look good for Siemens, however. Stephen Beard reports.
Flags carrying the Siemens logo (Johannes Simon/Getty Images)
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Renita Jablonski: Electronics giant Siemens reported earnings today. Second-quarter net profit slid 67 percent. At the same time, an investigation is showing further evidence of corruption at the German company. As Stephen Beard reports, that could cost it plenty in the United States.
Stephen Beard: Since the scandal broke 18 months ago, Siemens has tried to come clean. The company hired an American law firm to investigate. The allegations are of bribery on an industrial scale. It's claimed that Siemens employees paid $2 billion in bribes to get contracts in the developing world. The law firm has just published its interim report. And, says Richard Milne of the Financial Times, it does reveal widespread corruption.
Richard Milne: They've found violations of the law in almost every division that they've looked at. And this is potentially, could be very costly for Siemens in the United States with the SEC.
Siemens is listed in the U.S. and therefore subject to the Foreign Corrupt Practices Act. This could lead to a fine up to four times the size of the bribes. In Siemens' case, this could be a staggering $8 billion. The company says it hopes to negotiate a settlement.
In London, this is Stephen Beard.
