The Third MAN Executive Quits Amid Corruption Scandal

The Chief Executive of German heavy goods vehicle and industrial company MAN Nutzfahrzeuge AG, Hakan Samuelsson, has resigned.  The reasons for the departure remain unclear.  While Samuelsson is the third director to resign as MAN grapples with allegations of corrupt practices, the German Public Prosecution Office (PPO) has stated that no allegations have been made against him.

On 6 May 2009 MAN announced that it had launched an internal investigation into payments at its heavy goods vehicle and bus division from 2002-2005. The aim of the investigation was to reveal any potential misconduct by any of its employees.  MAN then offered amnesty to employees willing to come forward with information relating to corruption allegations.

MAN stated it ‘does not tolerate any illegal or irregular conduct by employees’ and has ‘compulsory conduct guidelines and clear rules’ for ‘all employees’ forbidding them ‘from conferring benefits of any kind with the aim of obtaining orders or unfair advantages for MAN or other persons’. The company has a compliance officer and a steering committee to enforce the rules, as well as a compliance hotline and two external ombudspersons whom employees can contact anonymously. It said it would cooperate closely with PPO, which began its own investigation into MAN from 2002 to 2009, searching company offices across Germany from 5 May 2009.

The PPO claimed MAN was suspected of paying approximately €1 million in illegal commissions in Germany and several million euros in other countries in return for deals to sell and lease heavy goods vehicles and buses to customers in Germany and internationally. It has been alleged that some payments were made to employees of MAN customers via the accounts of relatives and friends, sometimes via letterbox firms in Malta, the Bahamas, London and New York. German media reports have estimated the payments outside Germany to be approximately €15 million. More than 100 people are being investigated.

It has been reported that the corruption affair could cost MAN up to €300 million in fines and fiscal sanctions.

Sam Eastwood is a litigation partner and Head of the Business Ethics and Anti-Corruption Group and Chris Campbell-Holt is a researcher at Norton Rose LLP, http://www.nortonrose.com/. Chris was a member of the Secretariat of the Woolf Committee that was appointed by BAE Systems’ Board to report on BAE’s ethical policies and processes. Sam can be contacted on +44(0)20 7283 6000 or by email: sam.eastwood@nortonrose.com.

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