MUNICH, Germany In the Siemens corruption scandal, the company's Audit Committee has decided to contract an external auditor. Nevertheless, former CEO and present supervisory board president Heinrich von Pierer gets under pressure.
In its Monday (Dec. 11) meeting, the supervisory board decided to retain international law firm Debevoise & Plimpton LLP to conduct an independent and comprehensive investigation of the case and of the entire Siemens compliance system. Interestingly, Siemens already has contracted an external auditor - the advisory service provider KPMG. However, this company has been criticized because of its obvious failure to detect the black money system that presently shakes the company and shocks its shareholders and customers. Over years, about 200 million ($265 million) have been fed into this system and probably been used to bribe potential customers. KPMG now will support Debevoise in its efforts, Siemens informed in a press release.
As a further measure, the Siemens Audit Committee has appointed Michael J. Hershman as compliance advisor. Hershman is co-founder of Transparency International and is said to be an internationally recognized anti-corruption expert. Ironically, the German section of Transparency International seems to be determined to exclude Siemens. In an Interview with newspaper Die Welt,TI Germany president Hansjörg Elshorst last week had announced that after Dec. 15, Siemens would not be a member of the anti-corruption organization. The Siemens membership was frozen for different reasons for about two years.
In the meantime, former CEO Heinrich von Pierer got under fire from business experts. Pierer led the Company through most of the time relevant for the bribery system recently detected. The magazine Focus Online quotes business administration professor and management expert Alexander Bassen saying that Pierer probably would not carry out the investigation in an appropriate way. In the same edition, business administration professor Manuel Theisen from the Munich university referred to potential interest conflicts in the clarification of the scandal. "Mr. von Pierer is no longer tolerable at the top of the supervisory board. He should recognize this by himself", Theisen said.
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