Siemens restructures after corruption claims

Siemens plans to restructure its operations, introducing 15 divisions under its three industry sectors as of January 2008, when the industry and energy sectors will each have six divisions, and its healthcare sector, three. The new global heads of the divisions will be announced early in December.

The restructure follows a filing to the USA’s Securities and Exchange Commission, saying it had identified ‘material weakness’ in its internal controls over financial reporting which could affect its ability to report its results accurately and that its anti-corruption controls as of September 30, the end of its fiscal year, were insufficient to prevent managers from misusing funds.

Big four firm KPMG, which audits Siemens' financial statements, said in a report which was part of the 20F filing that Siemens' internal anti-corruption controls were ineffective.

‘As of September 30, 2007, the investigations of this failure, and the implementation of the company's remediation plan to address it, were not far enough advanced to provide a sufficient level of assurance that such circumvention or override of controls and misuse of funds by management would be prevented,’ KPMG said. ‘We do not express an opinion or any other form of assurance on management's statements referring to corrective actions taken after September 30, 2007.’

Further reading:

Siemens looks forward to more global partners