Nigeria vows zero tolerance as investigation begins into Siemens bribes

Nigeria is to hold a full investigation into bribes paid by Siemens, the German engineering group, to several of its former ministers.

President Yar'Adua announced the move by security agencies as part of a widespread crackdown on corruption.

Mr Yar'Adua took office in the summer and pledged zero tolerance for corruption to rid Nigeria of its tainted image for bribery.

At the summit of Opec heads of state last weekend, a spokesman for the President said that in "this Siemens scandal, as in all cases that border on good governance and transparency, there will neither be sacred cows nor a cover-up for anybody found culpable of breaching the law".

Siemens was fined €201 million (£144 million) in Germany last month after it emerged that it had paid more than €10 million to ministers and officials in Nigeria, Russia and Libya.

The court did not give out details of the bribes. Siemens accepted the judgment.

The payments identified by the court in Munich are only part of biggest bribery scandal in the country's corporate history.

Siemens's own investigations have uncovered more than €1.3 billion in suspicious payments.

The company is braced for action in the United States, where it could face massive fines and also be frozen out of public sector contracts if it is found to have systematically bribed its way into contracts.

Four Nigerian ministers and other officials in the country are believed to have received the lion's share of the €10 million identified by the German court.

Siemens has sold telecoms equipment in Nigeria, but it is not clear what contracts the company was seeking through the bribes.

The Nigerian bribes are said to have taken place between 2001 and 2004, although the former ministers named in the Nigerian press have denied that they took payments.

According to court papers that were made public yesterday, the former ministers were Bello Mohammed Haliru, Tajudeen Olanrewaju, Cornelius Adebayo and Alhaji Haruna Elewi.

Reinhard Siekaczek, a manager in Siemens's telecoms equipment unit, was identified with the payments.

He has also been charged with embezzlement.

Two weeks ago Siemens said that it had mostly completed its own investigations after hiring Debevoise & Plimpton, an American law firm, last December to conduct an inquiry.

It is believed that Siemens's activities in 65 countries have been put under the microscope.

The German company has also appointed Peter Solmssen, an American lawyer, as a board member responsible for compliance.

The US Securities and Exchange Commission is investigating Siemens's actions and has the potential to deliver a much greater blow to the business than the German courts.

Observers believe that the Siemens case could give the US the opportunity to show that it is serious about cracking down on foreign companies over corruption.

The record fine imposed in the US for corruption was $44 million (£21 million) in April on Baker Hughes Services International, after allegations that it had bribed its way into an oilfield services contract in Kazakhstan.

It is thought that a fine on Siemens could exceed this if the German group is found to have been involved in multiple bribes.

Nigeria's investigation comes after similar action connected to Willbros, an oil services company.

A former Willbros executive pleaded guilty this month in America to paying $6 million in bribes to senior officials from the Nigerian Government and the state oil company to win a contract to build a pipeline.