Siemens: Experts To Probe Its Compliance, Control System"

FRANKFURT -(Dow Jones)- Siemens said Monday it has decided to appoint law firm Debevoise & Plimpton LLP to conduct an independent and comprehensive investiagion of the compliance and control system of Siemens. KPMG, Siemens' independent auditor, will support Debevoise in its efforts.

Debevoise has also been charged with the task of examining the quality and effectiveness of Siemens' compliance processes.

Siemens said its Supervisory Board, Audit Committee and the Managing Board Monday defined a set of measures designed to examine and improve Siemens' worldwide compliance and internal control systems.

"Siemens tolerates absolutely no illegal or irregular conduct by employees - and I really mean zero tolerance," said Chief Executive Klaus Kleinfeld.

"We are employing the knowledge and experience of external and independent experts to track down specific cases of misconduct and gaps in Siemens' regulations, structures and processes and to make our compliance system absolutely watertight," Kleinfeld continued.

In this connection, the Audit Committee of the Siemens Supervisory Board decided to retain the leading international law firm Debevoise & Plimpton LLP. Debevoise is active worldwide, with offices in New York, Washington, London, Paris, Frankfurt, Moscow, Hong Kong and Shanghai.

The firm has outstanding experience the area of internal corporate investigations and supports companies in managing investigations by authorities. The Audit Committee has instructed the attorneys of Debevoise to conduct an independent and comprehensive investigation of the compliance and control system of Siemens, including the clarification of recent cases. KPMG, Siemens' independent auditor, will support Debevoise in its efforts. Results of the investigation will be reported directly to the Audit Committee. In addition, Debevoise will commission an independent auditor to support the investigation of Siemens' internal control systems and individual cases with forensic accounting experts.

As a further measure in the examination of the compliance rules and systems of Siemens, the Audit Committee and the Managing Board of Siemens have also appointed the internationally recognized anti-corruption expert and co-founder of Transparency International Michael J. Hershman as compliance advisor.

His specific task will be to advise the Audit Committee and the Managing Board in regard to the future setup of the compliance organization, the implementation of compliance reviews, and the review and adaptation of anti-corruption related controls, regulations, guidelines, communication and training.

Hershman, president of The Fairfax Group, is a pioneer in fighting white-collar crime. He co-founded Transparency International (TI). For the past 11 years, Mr. Hershman served on the Board of Directors of the US chapter of TI and is Chairman of its Audit Committee. Hershman served as a senior staff member of the US Senate Watergate Committee and was the Deputy Auditor General of the US Agency for International Development.

Hershman has been assured both the full cooperation of employees and independence in performing his tasks. He will regularly report results both to the Audit Committee of the Siemens Supervisory Board and to the Siemens Managing Board.

The Audit Committee and the Siemens Managing Board have also decided to appoint an external legal expert as the head of the Siemens Compliance Office. He has many years of experience investigating white-collar crime and will take on his new responsibilities at Siemens in January 2007.

As previously reported, Siemens has set up an internal Compliance Task Force, led by Corporate Executive Committee member Jürgen Radomski. The task force will fully support external anti-corruption and control experts in their work and continue processing cases. Siemens reaffirms that it is fully supporting the Munich Department of Public Prosecution in its ongoing investigations.

(END) Dow Jones Newswires"

Posted to the site on 11th December 2006