Siemens and Satyam

Chapter 2: Lessons Learned from Companies Caught in the Act

Posted by Dawn Lomer in on March 3rd, 2015

Chapter 1: Xerox and Ford

Chapter 2: Siemens and Satyam


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.


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-Packard

Chapter 4: Johnson & Johnson and Mattel

Chapter 5: BAE and Google

Chapter 6: International Monetary Fund and Verizon

Chapter 7: Happy Days Children’s Wear



Dawn Lomer
Dawn Lomer

Managing Editor

Dawn Lomer is the managing editor 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.