Siemens Head Office Searched

Investigators have searched the Moscow offices of engineering and telecoms giant Siemens in connection with corruption charges against one of its Yekaterinburg-based employees.

Nikita Kukushkin, a spokesman for Siemens in Moscow, confirmed by telephone that police from "state investigative bodies" had searched the company's main Moscow office on Dubininskaya Ulitsa on Monday during office hours.

"The search was part of an investigation involving an employee at the [company's] medical department in Yekaterinburg, connected to the embezzlement of budgetary funds," Kukushkin said.

A spokesman for the Investigative Committee, a semiautonomous body that comes under the auspices of the Prosecutor General's Office, confirmed that it had conducted the raid Monday at Siemens' office but declined to provide further details.

The authorities recently opened an investigation into Siemens' Yekaterinburg office, alleging that the company had overcharged the local authorities for medical equipment in 2005 and received preferential treatment in municipal contracts.

Lev Dubnov, the manager of Siemens' Yekaterinburg office, in the Sverdlovsk region, was arrested Nov. 15. Dubnov has been charged with embezzlement and limiting competition. Investigators have claimed that Siemens sold CT scanners to the local health department for 24 million rubles ($980,000) above the market value, Itar-Tass reported.

Dubnov remains in custody, Kukushkin said.

Alexander Shastin, first deputy head of the city's health department, was detained earlier in November in connection with the investigation.

Early reports in the Russian media stated that an employee from the Moscow office was detained Monday. Kukushkin denied the claim.

The latest development in the case comes at a time when the German firm is mired in a widespread bribery scandal centered on its telecommunications business.

On Oct. 4, Munich's district court fined the company 201 million euros ($295 million) over a total of 77 cases of bribery in Nigeria, Libya and Russia from 2001 to 2004 at Siemens' telecoms unit. In copies of court documents posted on The Wall Street Journal's web site, Siemens' employees are listed as having paid nearly 40 bribes in Russia during the period in question.

The scandal, which has tarnished Siemens' reputation and caused material damage to its operations, led to the resignations of chairman Heinrich von Pierer and chief executive Klaus Kleinfield earlier this year.

Related investigations are also being conducted into Siemens' activities by law enforcement agencies in a number of other European countries.

Andreas Schwab, a spokesman for Siemens at its Munich headquarters, said the company's internal investigation was still ongoing.