FRANKFURT—German industrial conglomerate Siemens AG will stop doing business in Iran by the middle of 2010, the company said Wednesday, as international pressure grows to isolate the country over its disputed nuclear program.
Siemens CEO Peter Loescher made the announcement at the annual shareholders' meeting in Munich on Tuesday, but spokesman Wolfram Trost said the decision had been made already in October.
"We will not accept any new contracts from Iran after the middle of this year," Trost said Wednesday, noting the decision "reflected the country's situation globally."
The company has come under fire from Western nations, including Germany and the United States, for continuing to do business in Iran, whose government they say is developing a nuclear weapon. Tehran insists the program is for civilian uses only.
Trost said Siemens' business with customers in Iran amounted to about euro500 million ($700 million), or about 0.7 percent of the company's total revenue in fiscal 2009.
"Our activities in Iran are only civil projects; we're not involved in any weapons or nuclear programs. We are in the field of infrastructure, energy and health care there," he said.
Ronald Lauder, the president of the World Jewish Congress, praised the move as a "courageous decision" and said he hoped other European companies would follow suit.
"We need a coalition of responsible companies that recognize the threat posed by Iran," he said in a statement.
Before Tuesday, Michael Spaney, a spokesman for the activist group Stop the Bomb, said it would continue to demand that Siemens stop its trade with Iran.
"Iran business deals support directly the Iranian regime, undermine international efforts for sanctions against Iran's nuclear program and is a stab in the back for Iran's freedom movement," Spaney said in a statement.
In other business at the company's AGM, Siemens shareholders approved proposed settlements with nine former members of Siemens boards tied to a massive corruption scandal at the company which started unfolding in 2006. The settlements which will so far see some of the former board members pay damages to Siemens, include those with the former Chief Executives Heinrich von Pierer and Klaus Kleinfeld. Kleinfeld is currently the CEO of aluminum company Alcoa Inc. of Pittsburgh.
Siemens, however, didn't yet mention any agreement Tuesday with former board members Thomas Ganswindt and Heinz-Joachim Neubuerger, who are involved with a criminal investigation into the corruption matter by the Munich prosecutor's office.
In December 2008, Siemens agreed to pay more than $1 billion in fines in Germany and the United States, for, among other charges, allegedly giving customers payments to secure business, especially internationally.
Shares of siemens were down about a fifth of a percent at euro67.77 in Frankfurt afternoon trading.
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