Siemens Shut Out From World Bank Projects After Bribery Scandal

Siemens AG, the German engineer that's emerging from a global bribery scandal, will be shut out from World Bank financed projects for two years and the company agreed to pay $100 million to support anti-corruption work.

Siemens also agreed to refrain from entering World Bank tenders in Russia for a period of four years, the Washington- based global lender said in a statement today. Siemens had previously flagged a World Bank ban of one to eight years.

The agreement is a "clear reminder" of past failures, Siemens lawyer Peter Solmssen said in a separate statement. The maker of power turbines, scanners, and trains faces a minimum six-month vendor ban from the United Nations in the wake of the scandal that led to fines in Germany and the U.S. totaling $1.6 billion. World Bank contracts generated about $140 million in revenue a year on average, the German company said.

"Many observers did not really have this issue on the radar screen," said Theo Kitz, an analyst at Merck Finck. "I hope this is the last negative pieces of news we will get regarding this corruption scandal."

Siemens shares fell as much as 5 percent, or 2.5 euros, to 47.68 euros in Frankfurt trading, valuing the Munich-based company at 43.8 billion euros ($61 billion).