Siemens, the engineering multi-national, is caught up in another bribery scandal in Brazil:
German engineering giant Siemens self-reported to avoid criminal proceedings for its alleged involvement in a railway price-fixing cartel in Sao Paulo and Brasilia.
The Brazilian daily “Folha de Sao Paulo” reported in its Sunday edition (14.07.2013) on allegations that Munich-based Siemens illegally rigged prices and was possibly involved in a cartel in bids for the construction, fitting and maintenance of metro trains in Sao Paulo and the capital city of Brasilia. Siemens voluntarily self-reported to Brazilian authorities.
Bombardier of Canada (a French Alstom conglomerate), Spain’s CAF and Japan’s Mitsui corporate group are also reported to have been involved in the cartel. Illegal price-rigging among the global engineering firms is said to have raised bids to 10 to 20 percent higher than quotes typically found on the market.
The scandal could not come at a worse time. Brazil has been rocked by protests over rising transit fares. And Siemens was hoping to bid on subway and high-speed rail projects. Those projects are now in hiatus.
It is also not the first time this has happened. Just a few years ago, the corporation was involved in similar bribery scandals:
Siemens AG, the European engineering company rocked by a bribery scandal in 2006 and 2007, said it replaced the head of its Brazilian subsidiary with immediate effect because of compliance violations.
The German company, based in Munich, named Paulo Ricardo Stark to succeed Adilson Antonio Primo, according to a statement today. An internal investigation had uncovered “a serious violation of Siemens guidelines occurred within Siemens Brazil prior to 2007,” the company said.
Chief Executive Officer Peter Loescher stepped up internal compliance at Siemens after a bribery scandal that haunted the company for years, cost about $3.2 billion and felled two of his predecessors. Siemens was investigated in at least a dozen countries, in the biggest bribery case in post-war Germany.