Embezzlement scandal affects Nokia merger partner

Bribery also suspected at Siemens networks unit

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Allegations of embezzlement and bribery at the German electronics company Siemens involve a unit that is to merge with Nokia's mobile telephone networks unit at the beginning of next year.
     According to newspaper reports, abuses totalling more than EUR 100 million have been uncovered in the fixed networks unit of Siemens, which is to become part of the planned new company Nokia Siemens Networks.
     German police raided several Siemens offices, as well as homes of company employees last week. The investigation extends to the top management of the company. Police had also gone into the office of Siemens President and CEO Klaus Kleinfeld.
     Munich prosecutor Anton Winkler says that Kleinfeld himself is not a suspect. He said that four people are now under arrest. Helsingin Sanomat has learned that those who were arrested are not directly involved with the part of Siemens that is involved in the merger.
     In Nokia's view, the suspicions will not have any impact on the schedule for setting up Nokia Siemens Networks.
     "It is an internal matter for Siemens, and it has nothing to do with Nokia. We have no other comment", is the message that came from Nokia. The company also will not say when it learned about the police investigation.
     
Siemens has previously said that it has known for a year already that Swiss police have been investigating suspected money laundering and possible bribes at Siemens. However, Siemens will not reveal which of its units the Swiss investigation applies to.
     "The case involves one or more former Siemens employees, and according to the investigation, money belonging to Siemens has been misappropriated to the tune of about 20 million euros", said Siemens information officer Andreas Schwab to Helsingin Sanomat.
     The investigation in Germany started when Swiss police asked German police for help in their investigation. The prosecutor says that some of the suspects have already given information to the police.
     According to German press reports, the suspicions of embezzlement and bribery involve 12 people and about EUR 100 million. A total of EUR 80 million was reportedly found on bank accounts of the heads of Siemens units in Greece and Austria.
     According to press reports, the suspicion is that the money had ben used for bribes paid out in connection with network deals.
     Prosecutor Winkler told the DPA news agency on Monday that there is no evidence of bribery so far. Investigations are continuing into the movements of the money.
     
Nokia and Siemens said in June that they would merge their mobile and fixed network units. The company's turnover will be about EUR 16 billion.


Previously in HS International Edition:
  Nokia strives for dominance of network market through fusion with Siemens (20.6.2006)
  Nokia and Siemens to combine their telecoms network operations (19.6.2006)

Helsingin Sanomat