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. Last Updated: 07/27/2016

Scandals at Siemens Claim Chief's Scalp

BERLIN -- The corruption scandals at German industrial giant Siemens claimed one of the nation's most prominent business leaders late last week, as the company said its chairman, Heinrich von Pierer, would resign in days.

In a statement, von Pierer said he was leaving out of a duty to Siemens and its more than 400,000 employees, not because of any involvement in the accusations of bribery that have roiled the company.

Von Pierer's departure is not a total surprise. He had been under mounting pressure to leave, even from other members of the company's supervisory board.

But his resignation is sure to reverberate through German corporate circles, where he has long been a distinguished figure.

Von Pierer's position on the board eroded in recent weeks because he had been chief executive during the period when the company is accused of giving bribes and other corporate corruption.

Prosecutors in Munich are investigating reports that more than $500 million in bribes were paid to foreign officials over the last seven years by the communications unit of Siemens to win contracts.

Current and former executives are also being investigated in two other bribery cases, one involving an Italian energy company, the other a German labor leader who represented Siemens workers.

The accusations are among the most far-reaching in corporate history in Germany, and they have all but obscured the robust financial performance of the company, which is 160 years old.

In the statement, released after 11 p.m. on Thursday when the newspaper Bild reported that his resignation was imminent, von Pierer, who is 66, said: "Siemens has run into a difficult situation due to the in-part apparent and in-part alleged misconduct of a number of managers and employees.

"I assume that electing a new chairman of the supervisory board will also make a contribution toward taking our company out of the headlines and bringing it back into calmer waters,'' he said.

Given the breadth of the accusations facing Siemens, von Pierer's departure is unlikely the settle the questions surrounding its senior management.

Last month, prosecutors arrested a top executive, Johannes Feldmayer, on suspicion that he was involved in bribing the head of a group that represents Siemens employees.

It is unclear, analysts who follow the company say, how the shake-up will affect the current chief executive, Klaus Kleinfeld. He has not been implicated in any corruption, and has responded to the accusations by hiring a law firm and anticorruption specialists to advise management.

By leaving, an official with ties to the company said, von Pierer may give Kleinfeld a freer hand to clean up Siemens, without fear of crossing his former boss.