Court fines Siemens NIS 63m. for conspiracy

The Tel Aviv District Court on Monday found Siemens Israel guilty of conspiracy to commit a crime. It fined Siemens Israel, which is controlled by the international Siemens AG conglomerate, NIS 63 million as part of a plea-bargain agreement.

Under the terms of the agreement, Siemens Israel admitted to conspiracy to commit a crime and agreed to pay the NIS 63m. fine to the state. In addition, the appointment of the external supervisor has been extended by one year as part of the arrangement agreed upon with Siemens international.

The agreement brings the entire affair to a conclusion after senior executives of Israel Electric Corporation were convicted of receiving bribes, also in a plea-bargain agreement, and were handed major prison sentences.

The events took place between 1999-2004, and since then IEC has undertaken a far-reaching change in its organizational culture.

The amended indictment, following Siemens’s admission, relates to a period when Siemens Israel and Siemens AG had major business interests with IEC. Relationships that developed among executives of the companies went beyond what is acceptable for representatives of a government company and those of a supplier bound by tenders.

Siemens Israel was also convicted of involvement in creating an infrastructure for transferring money from Siemens AG to Israeli recipients, concealing their source, using straw companies and fictitious consultancy agreements.

With the involvement of Siemens Israel, $9.5m. was transferred for bribes to senior IEC employees, from which $2.5m. was paid to IEC employees, the amended indictment said.