Siemens CEO Announces Resignation, Amid Ongoing Corruption Scandal

Press Release - April 27, 2007

Klaus Kleinfeld, the Chief Executive of scandal-ridden Siemens Electronics, announced Wednesday night that he would step down from his position at the end of September.

“In times like these, the company needs clarity about its leadership. I have therefore decided not to make myself available for an extension of my contract,” Kleinfeld said in a statement, referring to the board of directors’ unwillingness to grant him another term as CEO. “The company must have complete freedom of action,” he concluded.

Kleinfeld is the second major Siemens executive to announce resignation within the space of seven days. Heinrich von Pierer, chairman of the company’s supervisory board, and one of its longest serving executives, was forced to step down late last week.

Siemens has faced a series of corruption scandals in recent months, delaying the company’s joint venture with Nokia, and prompting the arrest of one board member late last month.

German media outlets, however, have criticized Siemens for forcing the resignation of von Pierer and Kleinfeld, neither of whom were directly connected to the alleged corruption and embezzlement.

“The resignation of Klaus Kleinfeld is not the solution to the problem. The move is much more likely to push the huge company even deeper into chaos,” according to Handelsbatt, a German financial daily. “Without a role model or a leader, this will be a crucial test for the highly complex company.”