
Siemens and Satyam
Chapter 2: Lessons Learned from Companies Caught in the Act
Posted by Dawn Lomer on July 25th, 2011
Chapter 2: Siemens and Satyam
Siemens Fine/Settlement: $1.6 billion in 2008 From 2002 to 2006, Siemens had a "bribery budget" in place. The funds were used to pay officials around the world to secure business contracts and other needs at Siemens. The purpose of the fund was well known throughout certain departments in the company's German operations. Siemens was extremely cooperative with investigators, which reduced the fine and granted amnesty to employees who were willing to bring information forward. Siemens was also allowed to plead to "accounting inaccuracies" as opposed to bribery because of its cooperation. Lessons Learned
- Tone from the top
- It was clear that Siemens needed to bring in someone from outside of the company to take over. Peter Löscher was the man for the job.
- Code of ethics
- When selecting leaders, choose people who embody the corporate mission and vision. Make sure leaders walk the walk to back up their talk.
As demonstrated by Siemens, bringing in someone from outside of the company can be the fresh start that some organizations need. Satyam Amount Overstated: $1.04 billion The Satyam accounting fraud scandal shook the company and the rest ofIndia. The false $1.04 billion in cash on the company's balance sheets equated to 94 per cent of the cash listed on the company's books. Satyam's Chairman, Ramalinga Raju stated that no one else on the board was aware of his actions. When news broke about Satyam, the value of the rupee dropped, as did Indian equity markets. Lesson Learned
- Corporate crime hurts everyone
- Corporate crime can impact the reputation of an entire country. After the scandal, it was predicted that Indian rivals would also face greater scrutiny by regulators, investors, and customers.
- The banking and finance sector in theUSis another example. A loss of trust, increased regulation and tighter enforcement have resulted from the actions of a few key players.
Chapter 3: Tyco and Hewlett-PackardChapter 4: Johnson & Johnson and MattelChapter 5: BAE and GoogleChapter 6: International Monetary Fund and VerizonChapter 7: Happy Days Children's Wear

Dawn Lomer
Manager of Communications
Dawn Lomer is the Manager of Communications at i-Sight Software and a Certified Fraud Examiner (CFE). She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery, and hosts i-Sight webinars.