JULY 21, 2005

A messy business in Germany

There is a scandal in Germany where the boss of microchip firm Infineon Technologies has resigned amid allegations that he accepted kick-backs in connection with a motorsport sponsorship deal. The bribes are alleged to have been paid by a Swiss marketing agency between 2002 and 2004.

Andreas von Zitzewitz, who headed Infineon's core D-Ram memory chip business, has resigned and another former board member Harold Eggers is under investigation. Munich prosecutors carried out raids on 15 different premises in Germany and Switzerland recently. The scandal has grown out of a dispute between Infineon and BF Consulting over the cancelling of its sponsorship activities last year.

This followed the sudden departure of chief executive Ulrich Schumacher in March 2004.

Schumacher had previously signed a three-year deal to supply the Ferrari F1 team with automotive electronic technology in 1999 but following his departure Infineon terminated its motor sport sponsorship. Infineon also sponsored the Jordan F1 team and the Le Mans winning Audi Sport. Mario Andretti represented Infineon in the US market while Infineon money was also used to buy naming rights to the Sears Point race track, sponsoring a Porsche Supercup team and to pay for a Champ Car team which ran cars in 2001.

There is no evidence to suggest that any of the teams were involved in the kick-backs.