In November 2006, 200 German policemen and prosecutors raided 30 offices and homes of Siemens managers to investigate allegations of embezzlement at Siemens’ fixed-line phone unit. In the wake of internal investigations started at the end of 2006, Siemens finally admitted to having identified dubious payments amounting to €1.3 billion from the years 1999 to 2006.
As a result, Siemens replaced all but one of its managing board members. At the end of July 2008, a former sales manager at Siemens’ telecoms division, Reinhard Siekaczek, was convicted for his role in setting up the slush funds used to win contracts.
In the B case, he shares his insights about the Siemens corporate culture, his lessons from the trial, and the pros and cons of the slush fund system he created.