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Last Updated: Wednesday, 28 March 2007, 14:38 GMT 15:38 UK
Siemens executive kept in custody
Siemens HQ in Munich

A Siemens board member, arrested in connection with an investigation into alleged bribery at the firm, has been kept in custody by a judge.

Johannes Feldmayer was held on Tuesday as part of an probe into alleged payments made to a union official.

The German engineering giant said Mr Feldmayer had requested to be excused from responsibilities at the firm.

Events have hit investor confidence in the company, with Siemens shares down 2.3% to 79.37 euros by mid-afternoon.

Offices raided

Mr Feldmayer is the most senior manager to be arrested in a series of probes into suspected corruption and fraud at Siemens.

He could be out tomorrow, or he could be in for a long time
Martin Reymann-Brauer
Lawyer for Johannes Feldmayer

The company said he had asked to be relieved "temporarily of his obligations and business duties on account of his current personal situation".

The arrest of Mr Feldmayer, who is responsible for the company's IT services unit and its building technology unit, came after German prosecutors raided Siemens offices in Munich, Erlangen and Nuremberg.

His lawyer, Martin Reymann-Brauer, said it was tricky to estimate how long his client would be held in custody.

"He could be out tomorrow, or he could be in for a long time," he told the Reuters news agency.

Corruption probe

Last month, the head of the AUB Labour organisation, Wilhelm Schelsky, was arrested in connection with searches at Siemens and AUB.

Siemens has said that Mr Schelsky, a former works council member at the company, had acted as an adviser on employee training and other issues, but that his contract with the company had been cancelled at the end of 2006.

According to the Munich-based firm, Mr Schelsky had received payments totalling 14m euros ($18.6m; 9.5m) since 2001.

In a separate high-profile case, prosecutors allege that company managers siphoned off hundreds of millions of euros in Siemens money - as much as 200m euros - and some of that money may have gone to win contracts abroad.

The allegations of embezzlement and corruption has prompted Siemens chief executive Klaus Kleinfeld to hire an outside anti-corruption expert and a law firm to examine and revise the company's safeguards.

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