KARLSRUHE, Germany Aug 29 Germany's highest
appeals court ruled on Friday that corporate slush funds used to
win contracts are illegal and that staff who use them can be
convicted of breach of trust.
The Federal Court of Justice verdict gives prosecutors a
powerful tool to pursue corruption cases at companies such as
Siemens (SIEGn.DE), which is under investigation for systemetic
"The verdict makes clear that the very fact of holding slush
funds constitutes the crime of breach of trust," said Federal
Prosecutor Wilhelm Schmidt, adding that Munich prosecutors
investigating Siemens would seize on the ruling.
The case centred on the convictions of two former Siemens
executives sentenced last year for using slush funds to win
telecommunications contracts from Italy's Enel (ENEI.MI) between
1999 and 2002.
The court ordered new trials for both, ruling that while the
main defendant was properly convicted of breach of trust, he
should not have been found guilty of bribery.
It noted that bribing foreigners abroad was not illegal
until 2002 and that the Enel staff who took the bribes were not
state officials in the eyes of the law.
The second manager was convicted of conspiring to bribe.
Both got suspended sentences and a fine.
The court struck down a 38 million euro ($56 million) fine
against Siemens over the bribes.
(Reporting by Hendrik Sackmann; Editing by David Cowell)
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