Siemens stained by corruption charges

News of the scandal, based on alleged bribes made to secure European fixed-line telco contracts and other fraudulent activities, broke last week.

Six Siemens executives have been arrested, among them former telecoms unit chief financial officer Michael Kutschenreuter, currently head of Siemens' real estate division.

A "slush fund" reportedly containing €200m has been uncovered in a number of Swiss bank accounts.

An army of German police and tax inspectors raided Siemens' offices and the homes of executives, and seized over 30,000 documents.

In prepared statements Siemens has insisted that the scandal is the work of individuals and not a company-wide problem.

"We have to relentlessly clarify and punish irregularities. Employees who violate our compliance regulations hurt Siemens in every respect. We cannot tolerate this," said Siemens chief executive Klaus Kleinfeld.

The company said in a statement that business conduct guidelines will be strengthened, and employees suspected of involvement will be suspended during the investigation.

The investigation was launched when a whistle-blower within Siemens tipped off the Swiss authorities about suspected money laundering.

Siemens engaged attorney Hans-Otto Jordan of Nuremburg law firm Dr Beckstein & Partners to act as an external ombudsman and provide a protected communication channel for Siemens employees.

The vendor has instructed its audit and compliance departments to work with a US compliance lawyer to examine the company's internal control systems for any possibilities of circumvention.

Siemens claims that its compliance programme is based on regulations laid down by the US Securities and Exchange Commission.

Siemens updated its Business Conduct Guidelines in 2001 when the company was listed on the New York Stock Exchange.