Corporate Scandal Siemens Reels After Death of ex-CFO

Heinz-Joachim Neubürger, the former chief financial officer of Siemens, had finally reached a settlement with his former employer for his role in a bribery scandal nearly a decade ago. Then he committed sucide.
Heinz-Joachim Neubürger was far more than a mere controller.

Heinz-Joachim Neubürger's suicide has sent a shock wave through Siemens.

Mr. Neubürger, who took his life on Friday, had recently reached a settlement with the Munich-based engineering giant that had sought compensation for his role in a corporate bribery scandal in 2006.

Everything seemed to have been resolved in the years-long dispute, and then came the shock and mourning.

“The last seven years broke him down," a friend said. "The man couldn't take any more.”

The company's chief executive, Joe Kaeser, said the difficult phase of working through the corruption scandal had been resolved through a compromise settlement with Mr. Neubürger. “Both parties were relieved and had been able to bring to an end a burdensome chapter in a relationship that otherwise was characterized by great mutual respect,” he said.

Mr. Neubürger was known as a stickler for correctness, someone who wanted to live without blemishes. Even after its formal resolution, the corruption affair and the challenge of overcoming it continued to haunt him, according to people close to him.

For years, Mr. Neubürger had vehemently rejected Siemens’ claims for compensation. He insisted he had done nothing wrong and refused to yield to pressure. He continued his dispute with the company in the courts long after former chief executive Heinrich von Pierer and other former management board members had come to out-of-court settlements with Siemens.

Mr. Neubürger, who came to the company in 1989 from  J.P. Morgan, was head of finances from 1997 to 2006.  He was one of Mr. Pierer's longstanding colleagues ― loyal and trustworthy but lax on compliance by today's standards.

Mr. Pierer told Handelsblatt that Mr. Neubürger was far more for him than simply a prudent financial controller. “He was also an astute advisor with high standards, someone who kept an eye on the long-term interests of the company and its employees,” he said. "It is simply horrible that this tragedy couldn't be prevented.”

Mr. Neubürger had pushed for splitting off Siemens' semiconductor unit, which later became Infineon, as well as the Siemens' listing on Wall Street.

Mr. Kaeser said Mr. Neubürger was held everywhere in high esteem as a financial expert. The former CFO was Mr. Kaeser's boss in the finance department. “We didn't always have the same opinion, and when we didn't, he was often right,” Mr. Kaeser said.

Mr. Neubürger had hoped to become the chief executive of Siemens but left the company after Klaus Kleinfeld was appointed.

But the repercussions of the bribery scandal continued. It was not possible to prove that Mr. Neubürger, Mr. Pierer and other members of the management board had been personally involved. A key question that has not been resolved up to today is: Should the Siemens management board have recognized a system of corruption earlier on and intervened?

It was a hard blow for Mr. Neubürger in 2013 when a court ordered him to pay €15 million in damages.

After leaving Siemens, Mr. Neubürger joined the investment firm KKR as managing director, but the corruption scandal dogged him. Gerhard Cromme, head of the Siemens supervisory board, continued to pursue a hard-line approach, demanding the company's former head of finance pay €4 million. He argued that the supervisory board must become active to avoid coming under suspicion of breach of trust itself.

Mr. Cromme was also worried about draconian punishments, especially in the United States.

“It's hard to say whether the company went too far at some point,” said Daniela Bergdolt from the German securities owners association, the Deutsche Schutzvereinigung für Wertpapierbesitz, on the course pursued by Mr. Cromme.

It was a hard blow for Mr. Neubürger in 2013 when a court ordered him to pay €15 million in damages. The judges based their decision on directors' and officers' liability. “That hit him out of the blue,” said a confidant.

Mr. Neubürger agreed to a €2.5 million stettlement at the end of January.

-WTB 2014



Axel Höpner has been writing about Siemens since 2008 and is based in Munich. To contact the author: [email protected]