News From Telecom World

Siemens bribed to bag contracts in Bangladesh, other countries

Posted on: December 15, 2008

Documents submitted to a US court in a case disclose that German industrial conglomerate Siemens bribed the authorities concerned to gain a telecom infrastructure contract in Bangladesh as it did at least in two other countries.

The case documents were submitted on Friday (12 Dec ‘08) to a US court, which is scheduled to hear the case – Siemens versus the US Department of Justice and the Securities and Exchange Commission, according to reports of the Associate Press and Bloomberg.

The papers were filed as Siemens decided to plead guilty and pay $800 million to settle the charges that it had violated anti-corruption laws by handing over $1.36 billion in bribes to government officials worldwide.

The court documents cited that from mid-1990s to 2007 Siemens had been engaged in systematic efforts to falsify bribe payments in its books and circumvent internal accounting controls.

In between 2000 and 2002 it bribed $18.8 million to Venezuelan government officials to win railway mass-transit contracts. Four Siemens subsidiaries paid $1.7 million in kickbacks to the Iraqi government to win $80 million in contracts under the UN Oil-for-Food programme.

A Siemens unit in Bangladesh paid $5.3 million (equivalent to Tk 37 crore at the current exchange rate) to win a telecommunications infrastructure contract in Bangladesh, Bloomberg reported citing the court documents.

Siemens and its subsidiaries in Bangladesh, Venezuela and Argentina have agreed to plead guilty on Monday in the district court of Washington in front of Judge Richard J Leon. A hearing on whether to accept the settlement is also scheduled Monday (15 Dec ‘08), court spokesman Sheldon Snook said, according to the news agencies.

‘The Munich-based company used off-book accounts to conceal illegal payments, mischaracterised bribes in corporate accounting and falsely described kickbacks paid to the Iraqi government in the United Nations Oil-for-Food Programme,’ US attorney Jeffrey Taylor said in the criminal information filed in Washington.

Marc Langendorf, a Siemens spokesman, said his company and US officials were ‘close to reaching a conclusion,’ but he declined to comment further.

Siemens, established in 1847, became embroiled in a bribery scandal disclosed in November 2006, leading to investigations in at least a dozen countries.

Senior Siemens Bangladesh corporate affairs officials in Dhaka on Sunday told New Age that only their chief executive officer should comment on the issue. But, the CEO, Rudolf P Klink, now in Germany in Christmas vacation, could not be reached.

The Bangladesh Telecommunication Regulatory Commission chairman Maj Gen (retd.) Manzurul Alam told New Age that during his 20-month tenure in the commission he had not been aware of any such bribery investigation.

However, he said the commission would investigate the clue disclosed in the Washington court.

Source: New Age


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