More Fallout From Tognum Investigation

Posted on October 28, 2011

Tognum has announced several measures regarding the ongoing investigation into potential improper payments by its subsidiary MTU Asia. The investigation - initiated by Tognum in February 2011 – has provided some preliminary results that have been submitted to the supervisory board and led to the measures being announced.

Tognum said the new Supervisory Board with members of majority shareholders Daimler and Rolls-Royce, together with the Management Board of Tognum adhere to strict policies of zero tolerance towards bribery and corruption. Both will continue to work to clarify these issues and take remedial action.

Tognum said it has ordered an immediate independent review of Tognum's compliance systems and their effectiveness. The company had already informed state prosecutors in Ravensburg, Germany, and pledged full cooperation with any separate investigation by the German Authorities. The supervisory board and Peter Kneipp, member of the Board of Management, have mutually agreed that Kneipp will be relieved of his duties effective immediately. His tasks will be taken over by Tognum CEO Joachim Coers. Kneipp, former manager of Tognum's Asia/Pacific region, took over the place of Reiner Breidenbach in Tognum Board of Management for the Business Unit Engines on January 1, 2011.

Last September, Tognum announced that the Executive Board was reduced in size from five to four members. Kneipp was appointed to assume overall market responsibility for the Engines and Onsite Energy Business unit. Christof von Branconi, responsible for Onsite Energy & Components, is also leaving the company, for personal reasons.

On October 27th, the Supervisory Board announced the appointment of four new members, all representative of major shareholders Rolls-Royce and Daimler.

In mid-October, Tognum announced there have been “conspicuities” concerning agent’s contracts with Asian sales partners of MTU Asia. "These conspicuities are under ongoing investigation of a forensic team of Ernst &Young by order of Tognum for several months,” the company added. Ernst &Young’s final report was released this week and led to the actions detailed above.