Siemens skirts whistleblower suit over alleged Chinese kickbacks

A U.S. judged has dismissed a lawsuit filed by a former Siemens Healthcare ($SI) employee who claimed he was fired after exposing a hospital kickback scheme in China.

As Bloomberg reports, a federal judge tossed the suit on grounds that the Dodd-Frank Act's whistleblower protection clauses don't apply overseas, also denying the ex-employee's request to refile his complaint.

The plaintiff, a former compliance offer at Siemens Healthcare's Chinese operation, said he encountered a culture of "evading and circumventing" anticorruption laws when he started at the company in 2008. Eventually, he discovered that Siemens was running a scam under which it submitted inflated bids to sell its diagnostic and imaging devices to public hospitals in China and North Korea and then unloaded the products at reduced rates to third parties, according to the lawsuit. Those intermediaries then sold the products at huge markups to hospitals, using the resulting windfall to bribe procurement officials on the company's behalf, the employee alleged.

The compliance officer brought his findings to Siemens Healthcare's Chinese CFO and was summarily put on administrative leave, according to the lawsuit, eventually having his contract terminated.

While the dismissal clears Siemens of at least any stateside legal trouble, the lawsuit's allegations of a culture of corruption are alarming considering the company's checkered history. Back in 2008, Siemens had to fork over $1.6 billion to U.S. and German authorities to settle sweeping international bribery charges, and the company disclosed last year that it is under investigation by prosecutors in Munich and New York.

But the German technology giant has been at working reforming its business model since then, starting from the top. Siemens jettisoned CEO Peter Löscher in July and has cut more than 15,000 jobs around the world as it works to reorganize its fractured model and return to revenue growth.

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