Thursday, April 21, 2011

UPDATE 1-Siemens loses World Bank business for 2 years

Will not bid for World Bank projects until 2011
* Could lose annual sales below 100 mln eur
* May suffer longer ban from World Bank projects in Russia
* Shares down 5.3 percent
(Adds background, quotes, share price)
FRANKFURT, July 2 (Reuters) - Siemens (SIEGn.DE) is being barred from World Bank projects for two years over the bribery scandal that shook the German industrial conglomerate.
The World Bank said in a statement on Thursday that Siemens would also pay $100 million over 15 years to support global efforts to fight fraud and corruption.
Its exclusion from World Bank-financed projects is backdated to January 1, 2009 and will run until the beginning of 2011, Siemens said.
The World Bank said the bidding block was part of a settlement in the wake of "past misconduct" in Siemens' global business and the bank's investigation into corruption in a Russian project.
Siemens ended one of the biggest corporate corruption investigations in history when it agreed in December to pay around 1 billion euros to settle probes by U.S. and German authorities into bribes it paid for years to win contracts. [ID:nN15508680]
The $100 million would go to organisations and projects aimed at combating corruption and to help governments recover assets stolen by corrupt leaders, the World Bank said.
Siemens said that under the agreement, Siemens' unit in Russia could be barred from World Bank project contracts for four years. A decision is expected later.
The World Bank has alleged that Siemens Russia paid about $3 million in bribes in 2005-2006 in connection with a bank-financed project in that country, it said.
Siemens said it could lose annual revenues considerably less than 100 million euros as a result of its exclusion from World-Bank financed contracts.
The company, which makes subway trains and turbines to hearing aids and lightbulbs, revised down in April its profit targets for fiscal 2009 and now expects to post an operating profit that would exceed 6.6 billion euros.
Its shares closed down 5.3 percent at 47.50 euros while Frankfurt's blue-chip index .GDAX lost 3.8 percent.

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