MAN risks 300 million euros in corruption costs: report

FRANKFURT: The German industrial conglomerate MAN could face up to 300 million euros (450 million dollars) in fines, costs and fiscal sanctions stemming from a corruption affair, a press report said on Monday.

A MAN spokesman said, the amount was just "speculation," and added: "The only firm figure is 50 million euros in internal investigation costs that have already been booked."

But according to the daily Sueddeutsche Zeitung, MAN expected to also pay a fine of between 200-250 million euros and a tax charge.

The group is the subject of a German judicial probe into alleged corruption involving about 10 million euros in foreign payments and around one million euros in Germany.

The money was allegedly paid as bribes to obtain contracts and sales of MAN busses and heavy trucks.

German investigators are looking at deals in Algeria, Greece, Italy, Israel, Libya and other countries.

One major contract in Greece involved the sale of electric trolley busses supplied ahead of the 2004 Summer Olympics in Athens.

That deal was suspected of involving serious corruption, the newspaper said.

MAN's former financial director and boss have already resigned for "personal reasons," and German media report that other board members could also leave the group.

Former finance director Karlheinz Hornung stressed in a statement when notifiying MAN of his resignation that "this step is not to be seen as related to the compliance investigation that is currently ongoing."

The head of the group's supervisory board, Ferdinand Piech, is now said to be placing aides in the management board with a view to merging MAN with Swedish truck maker Scania, which belongs to Volkswagen.

Piech is also head of VW's supervisory board and Europe's largest automaker owns almost 30 percent of MAN.

MAN's heavy truck division has been hit hard by the scandal and a concurrent global downturn in the transportation sector, and the group posted a net profit of just six million euros in the third quarter of 2009, down from 302 million in the same period a year earlier.

MAN also manufactures diesel engines and turbo machinery, and employs around 49,500 people worldwide.

Its sales last year totaled around 14.9 billion euros.