Siemens: Heinrich von Pierer is finally on his way. The departure of the Siemens chairman and former chief executive should help Siemens draw a line under the bribery scandals that have troubled the German conglomerate.
Investors are already rejoicing. The shares rose 4% to almost a six-year high on the news on Friday (20 April) morning.
Von Pierer will resign at next week’s board meeting following twin corruption scandals at Europe’s largest engineering group.
Von Pierer’s departure isn’t exactly magnanimous. Siemens is accused of making payments amounting to over €400m to secure telecom contracts and separately trying to undermine the country’s most powerful industrial union. The majority of the alleged events—involving bribery and alleged financing of a rival to its main union—are thought to have taken place during Pierer’s years as chief executive from 1992 to 2005.
German prosecutors are currently investigating whether Siemen’s telecom business, Com, paid bribes to win contracts between 2002 and 2006.
Yet von Pierer has not accepted any responsibility, despite running the company between 1992 and 2005, when most of the alleged corruption took place. Instead, it looks like von Pierer is simply trying to jump before he was pushed. He faced the possibility of an unceremonious ousting at next week’s AGM.
The spotlight now turns onto Klaus Kleinfeld, chief executive since 2005.
In his handling of the unfolding crisis, he has already successfully managed to separate himself from the old ways of Siemens—by appointing external investigators and quickly restating earnings. Although it seems that von Pierer had already lost much of his authority at Siemens, his presence at the top of the supervisory board might have slowed Kleinfeld down, or given him an excuse for not acting more radically.
Now Kleinfeld, who has not been linked to the bribes, has no reason to hold back. He has already shown a strong independent streak in the intended float of its VDO automotive electronics unit—a business von Pierer built up during his time at the top.
With von Pierer gone, a more lucrative trade sale may be more likely. Also, the group’s long-awaited joint venture of its troubled telecom unit Com with Nokia might finally get off the ground.
In his day, von Pierer himself was considered an innovator in the stuffy world of German big business. He did a great deal to reshape Siemens in the form of a modern, profit-centred company. But now he leaves on a sour note. Von Pierer’s temporary successor will be Gerhard Cromme, head of the supervisory board at German steel maker Thyssenkrupp. The next full-time chairman has not been appointed.