Siemens Exec Won't Step Down

FRANKFURT, Germany -- The former chief executive of Siemens AG, itself embroiled in a corruption scandal, said Sunday he will not resign as chairman of the company's supervisory board, despite a growing chorus for more accountability at one of Germany's biggest conglomerates.

In an interview with the newspaper Welt am Sonntag, Heinrich von Pierer, who was CEO of the Munich-based company from 1993-2005 before handing over the reins to Klaus Kleinfeld, maintained he would not be leaving the board.

"I will not step down. There is no question of it because I have done nothing wrong," he told the newspaper in a lengthy interview.

Siemens, which makes everything from cell phone network components to trains and is Europe's biggest engineering company by sales, has been rocked by investigations in Germany, Italy and Switzerland over money taken from corporate accounts and allegedly used to pay bribes to help land telecommunications deals.

So far, six people have been arrested, including Thomas Ganswindt, the former head of Siemens' telecommucations equipment unit who left the company in September to become CEO of Luxembourg-based Elster Group. One person has been released.

Siemens has launched its own internal investigation, hiring an outside law firm, New York-based Debevoise & Plimpton LLP, to assist its auditors, KPMG, to examine the estimated 420 million euros ($550.45 million) in payments made to various consultants since 1999.

Von Pierer told the newspaper that he did not see any conflict of interest in the investigation, given that the timeframe involved was during his tenure as CEO. The investigation, he said, was being led by Gerhard Cromme, the supervisory board chairman of Thyssenkrupp AG and a member of Siemens' own board.

In the interview, von Pierer said the company did not condone or endorse any type of corruption in the pursuit of new business, saying it was better to lose out on business opportunities than to engage in corrupt practices.

In another interview with Der Spiegel, which will be published Monday, von Pierer said he was surprised by the scope of the alleged corruption.

"I never would have dreamed that a group of managers and workers could have succeeded in effectively circumventing the controls that we have developed and implemented in recent years," he said, according to an advance copy released Sunday.

Siemens also said it was aware of some irregularities, noting in a filing with the U.S. Securities and Exchange Commission earlier this week that it learned prosecutors had seized Swiss bank accounts in Geneva that had been held by one of its former executives at its Greek communications unit.

According to the Dec. 11 filing, the accounts were seized in August 2005 and some bank accounts in Liechtenstein were seized in 2004. An account in Switzerland was discovered in June 2006, it said in the filing.

On Thursday, Siemens and Nokia Corp., its partner in a joint venture to market mobile network business components, said their planned joint venture, Nokia Siemens Networks, would be delayed from starting in January to later in the first quarter because of the investigation.

In June, Finland's Nokia and Siemens said they would combine their telecommunications network equipment units in a joint venture with projected annual revenues of 15.8 billion euros ($20.71 billion) in a move aimed at helping them compete with market leader LM Ericsson, attract new customers and put more pressure on rivals Motorola and Nortel Networks.

Network equipment includes items like the routers, modems and fiber-optic cable that help providers keep phones ringing and downloads moving without delay.

Shares of Siemens were up 0.38 percent to close at 74.28 euros ($97.35) in Frankfurt trading on Friday.

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