Siemens to sue if ex-directors do not pay damages

Sep 23, 2009, 12:44 GMT

Munich - Siemens warned seven ex-directors Wednesday it would sue them if they do not agree to pay damages in connection with a huge bribery scandal at the German company.

The company has demanded that a former chief executive, Heinrich von Pierer, pay 6 million euros (nearly 9 million dollars) in damages in connection with the misappropriation of 1.3 billion euros for kickbacks to corrupt labour leaders.

Since von Pierer left in disgrace, new chiefs have reformed the giant electrical company and paid enormous penalties to US and German authorities.

Siemens products range from turbines and trams to telecommunications systems. Kickbacks were revealed in Italy, Greece and other nations.

The statement, after a supervisory board meeting in Munich, indicated the talks with the ex-directors on compensation had made little progress. 

Siemens demanded that von Pierer and another former CEO, Klaus Kleinfeld, as well as Johannes Feldmayer, Thomas Ganswindt, Heinz- Joachim Neubuerger, Jürgen Radomski and Uriel Sharef admit breaches of duty and settle by mid-November.

That was the deadline so it could print and mail reports to the next annual general meeting of shareholders on January 26.

One news report, in the Sueddeutsche Zeitung newspaper, said Siemens might sue von Pierer for its entire losses, a sum of 2 billion to 3 billion euros, comprising the misappropriated funds, the penalties and the legal costs.

Von Pierer has steadfastly denied any knowledge of the corruption, but Siemens contends he had a duty to find out about it.

In August, three other ex-directors agreed to pay compensation.

The supervisory board approved those settlements on Wednesday as well as a deal with insurers who have agreed to pay the company 100 million euros under director-liability policies.