Siemens AG’s former CFO Heinz-Joachim Neubürger will pay the company €2.5 million ($3.1 million) to settle a civil recovery claim connected to the global bribery scandal Siemens resolved with U.S. and German authorities in 2008.
The German industrial giant brought claims against eleven former senior executives and supervisory board members for failing to stop corrupt payments around the globe.
In 2008, Siemens paid $800 million to settle FCPA charges with the DOJ and SEC, and $800 million more to German authorities.
The settlement with Neubürger, 61, pictured above, still needs approval at Siemens’ annual shareholders meeting on January 27 in Munich.
Neubürger served as an executive vice president and CFO of Siemens AG from November 1997 to May 2006. He joined the company in 1989. In June 2007, he became a managing director and senior advisor of Kohlberg Kravis Roberts.
Before Neubürger agreed to the settlement, Siemens had already reached agreements with ten executives, including its former chairman and chief executive. Those settlements totalled about $25 million.
Siemens had demanded about €15 million ($18 million) from Neubuerger. Although it won a lower court judgment against him for that amount, it said Friday he couldn’t afford to pay the judgment. He had won a counter-claim against the company for unpaid bonuses and stock benefits.
Paying €2.5 million “means Mr. Neubürger will have to forgo a large part of his personal assets as compensation for the damage,” Siemens said.
Siemens described the settlement and asked for shareholder approval in the invitation to next month’s annual meeting (pdf).
“The fact that Mr. Neubürger at least undertook — albeit inadequate — attempts at countermeasures against the illegal business practices that occurred in the course of international business transactions as of 2004 can also be taken into account,” Siemens said.
Neubürger’s settlement payment will be reduced by his claims for unpaid compensation. Siemens didn’t specify the amount.
Siemens agreed on settlement terms with nine of eleven former executives by January 2010.
The company then filed a lawsuit in the Munich district court against the other two — Neubürger and Dr. Thomas Ganswindt. Siemens alleged the executives hurt the company by not stopping the global bribery. In January 2013, Ganswindt agreed to a settlement, leaving only Neubürger in the lawsuit.
Siemens AG had revenues of about $93 billion in the latest fiscal year. It has about 370,000 employees worldwide.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
So, Dr. Bernd Ornersorge, hope you find th roadmap of your career in Siemens.
Former Compliance Officer of Siemens Healthcare China
D&O experts have told me that such cases are covered. It does not seem to be so in his case. It would be interesting to know what the situation is because the deterrent effect of such suits (of which there may be more soon) is very different depending on whether the outcome is covered by a D&O policy or not.
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