Former Siemens official convected of bribery

The first trial over scandals at Siemens AG took place in Germany on Monday. Two former company’s officials were convicted of bribery and assisting bribery for their involvement in multimillion-euro (-dollar) payments to officials at an Italian utility.

The Darmstadt state court also ordered Siemens to forfeit EUR38 million (US$51.4 million) in profits from deals with Enel of Italy. Siemens immediately said it would appeal against that decision.

The court found Andreas Kley, a 63-year-old former finance chief at Siemens' power generation unit, guilty of bribing managers at Enel and of breach of trust, and handed him a two-year suspended sentence.

Horst Vigener, 73, a former employee and consultant, was convicted of abetting bribery and given a nine-month suspended sentence.

During the trial, the two acknowledged involvement in paying kickbacks worth EUR6 million (US$7.9 million) to a pair of officials at Enel in a bid to win a series of contracts for Siemens-made gas turbines between 1999 and 2002.

Both asserted it had not been Siemens' idea to offer bribes to win contracts. Vigener's lawyer said the Enel officials had approached him with demands for payments, and Kley also said they had suddenly demanded money shortly before the contract was agreed.

Kley said in court that he had authorized the payment alone and had not consulted with top Siemens managers.

Prosecutors put at EUR450.3 million (US$592 million) the total value of contracts that were sought by a consortium of Siemens and Italy's Ansaldo, with at least EUR338.1 million (US$444.5 million) of that going to Siemens.

The court ordered Siemens to make a payment of EUR38 million (US$51.4 million), reflecting profits from the deal. The company swiftly announced an appeal.

"The company maintains that the courts order to forfeit the profits from two orders placed by Enel with Siemens Power Generation Group for the supply of power plant equipment in 2000 and 2001 is illegal," Siemens said in a statement. "The courts decision has no basis in law or in fact."

Judges stopped well short of a call by prosecutors for a 3Ѕ-year jail sentence for Kley and 1Ѕ years for Vigener, and for Siemens to pay EUR97.7 million (US$132.2 million).

The case is one of a number of corruption scandals that have put pressure on Siemens over recent months.

Siemens - which makes everything from cell-phone network components to trains and is Europe's biggest engineering company by sales - has been rocked by separate investigations over money taken from corporate accounts and allegedly used to pay bribes to help land telecommunications deals.

In a further case, a company executive was briefly detained earlier this year in an investigation into payments from Siemens to a company led by the head of Germany's AUB labor organization.

Board chairman Heinrich von Pierer last month stepped down, voicing hope that his successor could guide the company away from controversy. CEO Klaus Kleinfeld then said he would not renew his contract with the company. Neither man has been the subject of any of the investigations.

Siemens shares were up 0.5 percent Monday at EUR87.49 (US$118.37).