Siemens could be fined up to half a billion euros this week for price-fixing by the European Union.
According to a report in German weekly Focus, the penalty is intended to punish Siemens for illegal activity by VA Tech, an Austrian subsidiary in the power transmission and distribution business. It is alleged that VA Tech fixed prices for electricity supply switch gear between 1988 and 2002. Siemens took over the then-independent company in July 2005.
The Siemens CEO at the time was Klaus Kleinfeld and it was part of his strategic transformation of Siemens to cope with so-called global megatrends in the world market.
The Kleinfeld regime is facing a loss of reputation on several fronts. Siemens recently sold its loss-making mobile telephone unit to Benq which shortly thereafter went bankrupt. Siemens is also facing possible fines due to an embezzlement and bribery scandal.
Separately Siemens is withdrawing completely from the Sudan. According to a report in Der Spiegel, it is pulling out on political and moral grounds despite strong financial results. Some US investors have sold Siemens shares because they dislike its involvement in Sudan.
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