Law & Policy

Siemens' Companies In China Involved In Bribery Scandal

Chinese local media reports that in the unfinished bribery probe against Siemens happening in Europe, some Chinese companies and individuals have been included in the list of bribery.

KPMG in China, an auditor for Siemens, said in an internal audit report called "SAS 99 Audit Procedures-Summary of Results", which was released in November last year, that during their auditing, they found about EUD1.7 million worth of dubious consulting fees and they don't know for what kind of services Siemens for paid the fee. KPMG also said that there were a lot of other services unclearly marked in Siemens' contracts with its partners. KPMG defined the nature of Siemens's behaviors in the contract as foreign corrupt practices.

In the auditing, KPMG listed more than 20 other dubious receivers of these types of consulting fees, which was worth about EUD100 million, of which nine were related to Chinese companies and individuals.

In addition, according to Wall Street Daily, a former senior manager from Siemens' Telecommunications Department mentioned three high consulting fee receivers iand one of them was related to Chinese business. The report said that a person called Max Rennert received totally EUD4.74 million in consulting fees from Siemens by helping the company obtain a mobile communications project in China.

Christian Schmidt-Sommerfeld, a prosecuting lawyer in Germany, reportedly said that they had not carried out any investigation on these Chinese businesses or individuals, because they are not only focused on Europe, Africa and Saudi Arabia.

In November 2006, German police checked about 30 offices of Siemens in Germany, including the office of the current CEO Klaus Kleinfeld and detained several employees who were accused of offering bribes to other countries in exchange for projects. According to Siemens' internal investigation, the total bribery involved may be worth EUD420 million.

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