A corruption scandal that threatened to engulf Siemens and ended the careers of its former chief executive and chairman, finally came to an end yesterday with a record €1 billion (£890 million) payment to US and German authorities by the company.

Bribery and false accounting charges were filed against the 161-year-old electronics group after allegations that it paid hundreds of officials a total of €1.3 billion to win contracts.

Officials in countries including Nigeria, Russia and Libya allegedly received bribes to secure government contracts for Siemens through slush funds set up by the company's employees. At one stage, German officials said they were investigating the disappearance of €200 million from Siemens' accounts. Investigations against former board members and employees of Siemens are continuing.

The company will pay the German authorities €395 million, after paying €201 million in October 2007 over allegations relating to its former telecommunications division.

The inquiry into the company in the US will be dismissed after a $450 million payment to the Department of Justice and $350 million to the Securities and Exchange Commission. Siemens will pay a total of €1.2 billion over the allegations, significantly less than the €2 billion expected by some analysts but still the largest amount paid out in a corporate bribery case.

Jeremy Cole, a partner at Lovells, said: “This will focus the mind of corporate Europe as to the need for even more stringent compliance programmes.”

When the investigation was begun in November 2006, it led to blood-letting at the highest levels of Siemens. Klaus Kleinfeld, the chief executive, resigned in April 2007 after his offices were searched by prosecutors as part of the investigation. He denied any wrongdoing.

A week before Mr Kleinfeld quit, Heinrich von Pierer, the chairman and a former chief executive of Siemens, resigned, although he denied any personal responsibility for the affair. Both men are being pursued by Siemens for damages for failing to stop corruption.

In May, Munich prosecutors said that Mr von Pierer and other former company officials were being investigated for the administrative offence of breaching their corporate supervision duties, although they will not face criminal charges.

Three Siemens employees have already been convicted of offences relating to the scandal. Johannes Feldmayer, a former Siemens executive who headed its IT services business, received a fine and a suspended jail sentence for his role in helping Siemens bankroll an influential German union, and two former managers received suspended sentences for paying illegal bribes to managers at Enel, the Italian utility.

Soon after Peter Löscher took over as chief executive and president of Siemens in May 2007, half of its top 100 managers left the company in a move designed to shake up the business.

Mr Löscher said: “We regret what happened in the past. But we have learned from it and taken appropriate measures. This was concluded in record time and the fines were lower than many expected, but this is the beginning for us, not the end.”

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