Thursday, June 26, 2008

Siemens scandal could spread to former bank-owned firm: report

A corruption scandal that has rocked the German industrial giant Siemens threatens to spread to a company formerly part owned by the two biggest German banks, a press report said on Friday.

The daily Sueddeutsche Zeitung said Munich prosecutors were looking closely at Lincas, an import-export company based in northern Hamburg which was owned until 2003 by Deutsche Bank, Commerzbank, and the regional bank Berliner Bankgesellschaft.

The newspaper, which is well-informed on the Siemens affair, alleged that Lincas was suspected of having received payments until around that time from Siemens, a former client, and that the funds might have been used to pay bribes for business contracts.

Lincas was later taken over by Siemens, and the three banks have said they were unaware of a possible implication of the import-export company in any illicit dealings.

Since late 2006, successive revelations have brought to light the existence of a slush fund at Siemens which was used to ensure it won industrial contracts.

The affair has already resulted in the resignation of former boss Klaus Kleinfeld and head of the supervisory board, Heinrich von Pierer.

The first trial of a former Siemens director implicated in the scandal opened last month in Munich.

The industrial group, which manufactures a wide range of products from light bulbs to power stations and trains, acknowledged following an internal probe that 1.3 billion euros (2.0 billion dollars) disappeared into various funds.

Investigators have since determined that payments to obtain foreign contracts was a widespread practice among Siemens' multiple divisions.

~ From: AFP ~

 

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