Siemens scandal threatens to ensnare leadership

The corruption scandal that has rocked Siemens, a pillar of Germany Inc., is gathering pace in a way that could ensnare the company’s top management for the first time. On Monday, the IG Metall labor union plans to bring charges against Siemens for breaking German law by trying to influence labor through bribes. The measure is in response to allegations last week that Siemens transferred millions of dollars to finance a so-called independent labor association as a counterweight to IG Metall, Germany’s most powerful union. IG Metall said it would announce the filing from its Frankfurt headquarters after a final vote by its leaders. The legal action would be yet another blow to the company’s weakened executives, Klaus Kleinfeld and Heinrich von Pierer. Von Pierer is one of Germany’s most influential businessmen and has seats on boards of companies that include Volkswagen and Deutsche Bank. G Metall’s action would be especially threatening for Siemens’s management because IG Metall officials and its members hold nearly half the seats on the company’s supervisory board, which is similar to a board of directors and has the power to decide the fate of individual executives. Until now, the top officials of Siemens have remained relatively free of blame for the string of scandals at the company, Europe’s largest electrical engineering and electronics business, which manufactures computers, telephones and home appliances. But as scandals gradually ensnare more senior managers, the position of some executives appears to be growing more precarious. This is particularly true for von Pierer, who ran the company from 1992 to 2005, when he retired to head the supervisory board. Image source: jakouiller.com

News selected by Covalence | Country: Germany | Company: Siemens | Source: International Herald Tribune