The German engineering group Siemens said on Wednesday it would set aside around one billion euros (1.29 billion dollars) to pay for possible penalties linked to a damaging corruption scandal. Siemens said the sum, which would be booked in its 2008 accounts, "is based on the status of ongoing discussions being held between the company and authorities in Germany and the United States."
The German group faces the threat of heavy sanctions by the US Securities and Exchange Commission (SEC) since it lists shares in the United States. The 161-year-old Siemens is engulfed in a massive slush-fund scandal, in which it has acknowledged that up to 1.3 billion euros may have been used illegally to win foreign contracts.
Siemens, which makes everything from nuclear power stations to trains and light bulbs and employs about 400,000 people world-wide, found the practice was widespread across its numerous divisions.
The affair led to the resignation of a string of top executives, including chief executive Klaus Kleinfeld and his long-term predecessor and chairman of the board Heinrich von Pierer. In late 2007, a German fine of 201 million euros was levied against the group's communications systems division, which was the first identified as having made illicit payments.
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