Siemens says is pulling out of Sudan

Jan 21, 2007 (BERLIN) — The chief executive of Siemens AG (SI), which has been plagued by corruption allegations, said in remarks released Sunday that the German company’s policy must be to emphasize principles over profits and that it was pulling its operations out of Sudan.

Chief Executive Klaus Kleinfeld, who has hired an outside anti-corruption expert and a law firm to examine and revise Siemens’ own anti-corruption safeguards, told Der Spiegel magazine there is a “zero tolerance for corruption.”

He said this meant Siemens, Europe’s largest electronics and electrical engineering company, would forego large contracts on matters of principle, and also pull out of countries on moral and political grounds.

“We’re already doing that in Sudan,” he said. “We have decided to pull out of our branches of business out of there – (and) not out of security concerns.” He didn’t elaborate.

Six current or former Siemens employees are under investigation in Germany under suspicion of committing breach of trust against Siemens in cases stretching back to 2002 by setting up secret funds outside Germany.

Siemens said it identified suspicious payments involving some EUR420 million. Swiss and Italian prosecutors, who are also conducting investigations, suspect the secret funds were used to pay bribes to secure lucrative foreign contracts for the Munich-based company.

(AP)