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