Greece Reaches Settlement With Siemens Over Past Bribery Charges

Greece said Thursday it has reached an out-of-court settlement with German conglomerate Siemens AG (SI) in a bid to end a years-long dispute over past bribery allegations against the company.

The deal was formally approved by Greece's cabinet Thursday and will now go to parliament for final ratification, a statement issued by the finance ministry said.

"The issue has now closed," said a senior government official after the cabinet meeting.

Under the terms of the deal, Siemens will write off EUR80 million in unpaid arrears owed by the Greek government, pay EUR90 million in cash to the government for various purposes, and spend EUR100 million in new investments in Greece in 2012. It will also consider EUR60 million in future investments.

The case relates to claims by Greece that bribes paid by Siemens to various Greek governments to secure state contracts from the late 1990s up to 2007 have cost Greek taxpayers EUR2 billion. Part of that money is alleged to have ended up in the pockets of senior Greek officials who helped broker the contracts, according to a deposition by a former senior official as well as several former senior Socialists party officials.

Siemens has previously said it would cooperate with the Greek government in investigating the bribery charges after they were made public in a special parliamentary investigation last January. Earlier, it had rejected the allegations.

In November 2011, Greek finance and justice ministers were authorized to seek an out-of-court settlement with Siemens.

According to a recent report in the Kathimerini newspaper, Greece is pursuing a separate arbitration process in Paris over two of Siemens' top contracts from the period in question. One was a contract to digitize the network of Greece's main telecommunications provider Hellenic Telecommunications Organization SA (HTO.AT) and the other project involved a costly security system for the Athens 2004 Olympics that failed to work properly.

-By Nektaria Stamouli, Stelios Bouras and Alkman Granitsas, Dow Jones Newswires; [phone]; [e-mail]