January 20, 2007 / 4:56 PM / 13 years ago

Siemens CEO says firm is exiting Sudan: magazine

FRANKFURT (Reuters) - German engineering giant Siemens (SIEGn.DE) is pulling out of Sudan on moral and political grounds, its chief executive Klaus Kleinfeld said in a magazine interview released on Saturday.

Despite strong financial results, Siemens’ reputation has been hit by a 200-million-euro ($260 million) bribery and embezzlement scandal as well as by its involvement in Sudan, where 200,000 people are estimated to have been killed in the four-year-old conflict in Darfur.

Kleinfeld insisted to German magazine Der Spiegel that Siemens’ policy was never to pay bribes to secure contracts, and was asked if the company would ever cease operating in a country for political or moral reasons.

“That’s what we are doing in Sudan. We have decided to pull out all our business divisions — and not for security reasons,” he replied.

Sudan’s economy has boomed in recent years on the back of oil exports, but legislators from the United States, where firms have been banned from operating in Sudan since 1997, have put pressure on non-U.S. firms to exit Sudan too.

A small number of U.S. investors have sold Siemens shares in protest at its activities in Sudan, and on Monday European Union foreign ministers will consider whether to threaten Sudan with sanctions if it refuses to allow U.N. peacekeepers into Darfur.

Siemens operates in nearly 190 countries and reported sales of almost 24 billion euros in its last quarterly results.

Regarding the corruption allegations facing some of Siemens 475,000 employees, Kleinfeld said he was fully prepared to discuss the issue with shareholders at Siemens’ annual meeting on Thursday.

Kleinfeld added that he did not think a joint venture with Nokia NOK1V.HE was endangered by the scandal surrounding Siemens’ telecommunications division, where prosecutors suspect around 200 million euros was used to help secure contracts over the past seven years.

Siemens is investigating a further 420 million euros in dubious consultancy payments.

Separately, German news magazine Focus reported on Saturday that a total of 60 suspects had been questioned by prosecutors from Munich, where Siemens is based.

State prosecutor Anton Winkler declined to confirm the figure to Reuters.

Additional reporting by Christian Kraemer in Munich

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