Siemens corruption suspect got 1.8 mln euro payoff

DARMSTADT, Germany, Apr 17 (Reuters) An ex-Siemens executive on trial on accusations of illegal bribery received a payoff of more than 1.8 million euros ( DARMSTADT, Germany, Apr 17 (Reuters) An ex-Siemens executive on trial on accusations of illegal bribery received a payoff of more than 1.8 million euros ($2.4 million) to quit the company after irregularities emerged in 2004, a court heard on Tuesday.

Andreas Kley, finance chief of the German conglomerate's turbines division at the time, admits approving payments of 6 million euros to win contracts from Italian energy giant Enel between 1999 and 2002 but denies illegal bribery.

Under German law then in force bribes made abroad were only illegal if paid to representatives of the state.

Uriel Scharef, a member of Siemens's central executive board appearing as a witness in the Darmstadt district court, said he asked Kley to leave after an internal probe uncovered ''book-keeping intransparencies''.

Scharef, who has been a member of Siemens's executive committee since 2000 and whose responsibilities include the company's power businesses, said he asked no further questions of Kley pending the outcome of the current criminal proceedings.

''I read the report in which it clearly said there were irregularities and intransparencies in the book-keeping and accounting,'' Scharef answered when asked why he had not pursued the matter further.

Kley quit within a matter of weeks, receiving a total of 1.815 million euros in compensation and severance pay on top of his regular pension, the value of which was not disclosed.

Kley said in an earlier statement he did not question why he was asked to leave at the age of 61 after 35 years with Siemens, the judge told the court.

Kley and co-defendant Horst Vigener, 73, deny charges of illegal bribery and breach of trust, arguing they did not enrich themselves but rather the company in making the payments to win 450 million euros' worth of business from Enel.

The payments were not illegal bribes because the Enel managers who got them were businessmen and not civil servants, the defendants' lawyers say, even though Enel was controlled by the Italian state at the time.

Siemens is also at the centre of a bigger criminal investigation into suspected bribery at its telecoms equipment unit, where Munich prosecutors are probing the disappearance of about 200 million euros from Siemens' accounts over seven years.

Prosecutors suspect a ring of Siemens managers transferred the money into foreign accounts and used it to pay bribes to win telecoms contracts.

Siemens itself is also investigating up to 420 million euros of what it calls ''suspect payments'' over the seven-year period.

Another criminal investigation into suspected bribes paid to the head of a workers' organisation represented on Siemens' works council has led to the arrest of Siemens central executive board member Johannes Feldmayer, who is out of custody on bail.

REUTERS DKS RN1910 .4 million) to quit the company after irregularities emerged in 2004, a court heard on Tuesday.

Andreas Kley, finance chief of the German conglomerate's turbines division at the time, admits approving payments of 6 million euros to win contracts from Italian energy giant Enel between 1999 and 2002 but denies illegal bribery.

Under German law then in force bribes made abroad were only illegal if paid to representatives of the state.

Uriel Scharef, a member of Siemens's central executive board appearing as a witness in the Darmstadt district court, said he asked Kley to leave after an internal probe uncovered ''book-keeping intransparencies''.

Scharef, who has been a member of Siemens's executive committee since 2000 and whose responsibilities include the company's power businesses, said he asked no further questions of Kley pending the outcome of the current criminal proceedings.

''I read the report in which it clearly said there were irregularities and intransparencies in the book-keeping and accounting,'' Scharef answered when asked why he had not pursued the matter further.

Kley quit within a matter of weeks, receiving a total of 1.815 million euros in compensation and severance pay on top of his regular pension, the value of which was not disclosed.

Kley said in an earlier statement he did not question why he was asked to leave at the age of 61 after 35 years with Siemens, the judge told the court.

Kley and co-defendant Horst Vigener, 73, deny charges of illegal bribery and breach of trust, arguing they did not enrich themselves but rather the company in making the payments to win 450 million euros' worth of business from Enel.

The payments were not illegal bribes because the Enel managers who got them were businessmen and not civil servants, the defendants' lawyers say, even though Enel was controlled by the Italian state at the time.

Siemens is also at the centre of a bigger criminal investigation into suspected bribery at its telecoms equipment unit, where Munich prosecutors are probing the disappearance of about 200 million euros from Siemens' accounts over seven years.

Prosecutors suspect a ring of Siemens managers transferred the money into foreign accounts and used it to pay bribes to win telecoms contracts.

Siemens itself is also investigating up to 420 million euros of what it calls ''suspect payments'' over the seven-year period.

Another criminal investigation into suspected bribes paid to the head of a workers' organisation represented on Siemens' works council has led to the arrest of Siemens central executive board member Johannes Feldmayer, who is out of custody on bail.

REUTERS DKS RN1910