Siemens is close to reaching a settlement with the Securities and Exchange Commission in the bribery scandal that has led to a nearly complete turnover in top management, the Frankfurter Allgemeine Zeitung reports in its Aug. 20 edition. A settlement could come in time for Siemens to write down the expected multibillion dollar fine by the end of the Munich-based company’s fiscal year on Sept. 30, the newspaper writes, citing unnamed persons with inside knowledge of the negotiations.
If true, the timing of the settlement would be favorable for Siemens, and write off the fine in the same quarter that Siemens will book a $ 9 billion gain from sale of the company’s VDO auto parts unit. Another plus: The SEC won’t bar Siemens from competing for U.S. government contracts, reasoning that a ban would only hurt Siemen’s 70,000 U.S. employees, the Frankfurter Allgemeine reports.
However, the Frankfurter Allgemeine report should be regarded with skepticism. The SEC, facing the biggest violation of the Foreign Corrupt Practices Act ever, is not likely to gear its work to Siemens’ financial reporting needs. There will be a settlement—Siemens is not contesting the basic allegations and has said on numerous occasions that it aims to reach an agreement with regulators. But a settlement within the next six weeks seems like a lot to hope for.
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Business Week, Aug 20, 2008