Chinese business newspaper alleges kickback scheme among distributors for Siemens products

If the records of distributors of health-care equipment in China were used as an indicator, Germany's Siemens made well in excess of $50 million more in sales in the country than the company's own records showed. That's because the sales were fictitious, according to Yicai, a daily Shanghai Chinese-language business newspaper.

It said 37 distributors of such products in China have grouped together to get returned more than $5 million worth of 10% down payments they said they made for fictitious contracts but have not been returned as intended by the scheme, according to Reuters. It quoted Siemens as saying it "initiated internal investigations" in response to the report.

The German industrial conglomerate said on Monday in response to the article: "Regarding the points raised by some business partners as described in the news report, Siemens has attached high attention to them and has initiated internal investigations."

"Siemens pays high attention to taking pre-emptive measures against unfair competition and any other inappropriate business conduct," it said in a statement.

One distributor said the payments were a common practice and that the locally based healthcare division of Siemens would book the contracts and then funnel the down payments back to the distributors through other channels.

It "was considered to be helping each other act," the source was quoted as saying.

- read the article on Reuters