The World Bank has reached a settlement with Siemens AG related to the German conglomerate's past "misconduct", including alleged corruption, and will pay $100 million for anti-corruption measures of the global lender.
As part of the settlement, Siemens has voluntarily decided not to bid for World Bank projects for a period of two years.
The World Bank in a statement on Thursday said it has reached a comprehensive settlement with Siemens AG over the company's past "misconduct" in global business and a "World Bank investigation into corruption in a project in Russia involving a Siemens subsidiary".
The company has committed to pay $100 million over the next 15 years to support anti-corruption work and for two years the firm would not bid for the Bank's business for Siemens AG and all of its consolidated subsidiaries and affiliates.
Both parties have also agreed to a four-year debarment for Siemens' Russian subsidiary.
Earlier, the World Bank in its drive to fight fraud and corruption has debarred many companies including three from India -- Satyam Computer Services, Wipro, Megasoft and Nestor Pharmaceuticals -- from receiving any of its projects for a fixed period. There were also permanent debarments.
"This settlement provides significant consequences for past wrongdoing by Siemens.
"At the same time, Siemens ongoing extensive cooperation could help the World Bank hold more corrupt firms and individuals accountable for diverting precious development resources away from the people who need them," World Bank Integrity Vice-President Leonard McCarthy said.
Following similar allegations, the US had reached settlements with the US and the German authorities last year.
The World Bank said that Siemens two-year voluntary restraint means that the company loses the right to bid on Bank-financed projects until December 31, 2010.
In addition, Siemens would have to withdraw any bids not accepted as of January 2009 when the restraint period takes effect, it added.
Siemens AG affiliate 'Siemens Russia' would face up to a four-year debarment related to violations, prior to 2007.
According to the statement, the move follows an investigation by the World Bank into corrupt practices under the Bank-financed transportation project in Russia, the Moscow Urban Transport Project.
"We look forward to continuing to work with the Bank to eliminate fraud and corruption in our markets and we see this as confirmation of our work to establish a robust compliance program and to pursue collective action together with the Bank in those markets," Siemens Chief Compliance Officer Andreas Pohlmann said.
