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May 31, 2007 10:22 pm

Former Siemens executive quits Deutsche Telekom

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The bribery scandal at Siemens continued to cause reverberations on Thursday as Lothar Pauly, a former senior executive at the German engineering group, resigned from Deutsche Telekom .

Mr Pauly was head of the telecoms business at the heart of the bribery investigation at Siemens for a year until 2005 before he switched to become head of Deutsche Telekom’s business service unit, T-Systems. He has not commented on his reasons for resigning, but his lawyer yesterday said that Mr Pauly “denies any wrongdoing or knowledge of any bribery if indeed any took place”.

René Obermann, chief executive of Europe’s biggest telecoms group, told the Financial Times that Mr Pauly’s decision to step down was “a respectable move that will avert possible damage to Telekom”.

Mr Pauly is the latest in a slew of former Siemens executives to step down from their positions while denying any wrongdoing. The scandal has raised questions about whether management tolerated bribery.

Siemens has already lost its chief executive and chairman as a result of the investigation, while Thomas Ganswindt, another former head of the telecoms business, Heinz-Jochen Neubürger, a former chief financial officer, and Karl-Hermann Baumann, a former chairman, are suspects. All deny any wrongdoing and no one has been charged.

Siemens says it is actively co-operating with authorities to clear up matters.

Deutsche Telekom executives had discussed Mr Pauly’s position since allegations surfaced that he knew of bribery while at Siemens, according to officials at the telephone group.

Mr Obermann said there was as yet no successor for Mr Pauly and that his portfolio would be split between Karl-Gerhard Eick, finance head, and Hamid Akhavan, technology boss.

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