The chairman of German industrial giant Siemens, who is embroiled in a major corruption scandal, has finally decided to resign. Heinrich von Pierer has announced that he will step down next week after a board meeting. Siemens is currently engulfed in a huge slush-fund scandal, in which prosecutors have alleged that company managers drained off hundreds of millions of euros (dollars) in company money to get hold of foreign contracts. For several days Pierer, chairman of the board at Siemens, had been resisting possibility of stepping down over the seemingly never-ending series of corruption scandals that have been gripping the firm. However, on Thursday he finally succumbed to the growing pressure from within the company itself.
The departure marks an ignominious end to the career of one of Germany’s leading businessmen, who not only rose to the top of the German industrial giant but acted as an adviser to two successive chancellors. The scandals have ruthlessly smashed Siemens’ impression and status as most of the alleged corruption took place during his tenure as chief executive from 1993 to 2005. These involve alleged bribery and the alleged financing of a rival to its main union.
Prosecutors have charged that the employees concerned are suspected of collaborating to open slush fund accounts abroad and of operating a system to misappropriate firm’s money. Though the exact sum lost is fraud can not be ascertain as of now but prosecutors put the sum held in the accounts at €200 million and some of that money may have been used as bribes to acquire contracts abroad. The firm itself stated that it had discovered as much as €420 million in doubtful payments and its current chief executive Klaus Kleinfeld is spear-heading a determined anti-corruption drive within the company.
Von Pierer had been long refused to step down as supervisory board chief, even when the current corruption scandal snowballed. He has refused his involvement in any personal wrongdoing. He conveyed the group’s annual meeting in January of his ‘deep distress’ that his efforts to make certain full compliance with corporate government codes had visibly failed.
Sitting on the number two position on Siemens’ supervisory board, Deutsche Bank chief Josef Ackermann, has insisted that von Pierer’s ‘personal integrity is beyond any doubt. And this integrity is once again being proven by the step he has now taken.’
In the meanwhile, Pierer lashed out at prosecutors’ investigations into twin scandals at the German engineering group, saying he failed to understand the ‘disproportionate’ decision to arrest a senior executive last month. While highlighting that he was not under suspicion or charged of anything, he also criticized some media and unnamed people for damage the presumption of innocence of other people.
Comments
Had it been the case with any Indian telecom major , the story would have been different.
Who would have thought? I am not really surprised, though. Such a large corporation is bound to have such problems. Transparency in your company’s reporting is so important. I bet there is a lot of under the desk operations that go on.
well i think all country facing the same problem about corruption. Hope this never happen again.
That’s right. face the same problem. but that is the goodthing to do.