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Siemens names new CEO

Loescher steps up as bribery probe continues

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Engineering giant Siemens has appointed Peter Loescher as its new chief executive in an attempt to kick start efforts to restore the German firm's image.

Shares in Siemens rose as much as 2.7 per cent to a six-year high on Monday after its supervisory board surprised markets on Sunday by naming the Austrian born US healthcare industry executive as its next CEO.

Loescher is currently the head of global health at Merck & Co, a position he has held since April of last year, and will take over at Siemens on 1 July.

He arrives at a time of high crisis for the firm which is beset with bribery allegations. Siemens first informed investors about the allegations last November after German police searched company buildings and the homes of employees at 30 locations. The probe, which spread to countries including Italy and Luxembourg, forced Siemens to review payments and led to the temporary incarceration of former board member Thomas Ganswindt and acting board member Johannes Feldmayer.

German magazine Focus reported on Sunday that the firm may need to review as much as €3bn worth of transactions in connection with the probe.

Last week, Siemens was ordered by a German court to pay €38m as two former managers were found guilty in a bribery case. Andreas Kley, an ex-finance chief at Siemens's power-generation unit, and Horst Vigener, a former consultant to the company, were convicted by the regional court in Darmstadt on charges related to payments of €6m to managers of two Enel SpA units to win orders.

Despite the uphill task facing him, analysts have reacted positively to the appointment of Loescher. "We see Loescher's appointment as very positive, as it has ended the company's leadership crisis unexpectedly early," Christoph Niesel, a fund manager at Union Investment told Reuters. "He has an interesting background...he also knows (the) Anglo-Saxon investment culture and mentality and he speaks a lot of languages, which is an advantage at a company like Siemens."

Copyright © 2007, ENN

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