VIENNA/MUNICH Siemens is cooperating with authorities in Austria on an investigation into allegations of possible corruption related to hospital building contracts.
Several people are being investigated for serious fraud, the prosecutor's office in Feldkirch said on Tuesday, adding that the sums involved are believed to be less than 10 million euros ($10.99 million).
Siemens said the investigation was based on information the company had provided to the public prosecutor's office in the course of an ongoing compliance investigation.
"Siemens is cooperating fully with the authorities," the engineering company said, adding that it would not comment on ongoing investigations.
Austrian prosecutors said that five people had been arrested as part of the investigation, with several house searches taking place last week.
The prosecutor declined to confirm the name of companies or individuals involved.
German newspaper Die Welt on Tuesday said the alleged fraud concerned a "criminal system" in which suspects used forged documents to enrich themselves.
The allegations relate to inflated invoices for the delivery of building technology from Siemens' Smart Infrastructure division, the paper said, adding that the invoices were paid in connection with extensions and new buildings used by a public health operator in Vorarlberg.
The operating company, known as Vorarlberger KHBG, said it believed it was one of several companies affected by the alleged fraud.
"We are likely to have been overcharged over a long period of time," said supervisory board chairwoman Martina Ruescher in a statement. "The financial damage caused is considerable."
The company, which runs five hospitals in Vorarlberg, said it was considering seeking damages from Siemens, as well as examining its entire internal accounting systems.
($1 = 0.9098 euros) (This story has been refiled to remove superfluous phrase 'been of' in paragraph 9)
(Reporting by Alexandra Schwarz-Goerlich in Vienna and Alexander Huebner in Munich; Writing by John Revill; Editing by Friederike Heine, Miranda Murray, David Goodman and Louise Heavens)
