stocks collapsed on Friday, after
is suing the German company for alleged theft of a trade secret, which it claims was used to win billions of dollars worth of contracts.
Shares in the company, separation from
listed in September last year, were lower by 6.3% at the beginning of trading. Despite the fall, shares are still up 44% since its publication.
The lawsuit, filed in the U.S. District Court in Virginia on Thursday, alleges that Siemens Energy obtained the trade secrets of the US giant when both companies competed for a gas turbine contract for the Virginia-based energy company.
in May 2019, he claims that a senior Dominion employee shared details of GE’s contractual offer with a Siemens employee, who then passed on trade secrets to “dozens” of colleagues, including those responsible for Siemens’ own offer.
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These secrets were then used to improve Siemens’ own offer, eventually winning the contract worth between $ 225 million and $ 340 million, according to the lawsuit. Combining this injustice, Siemens waited 16 months before revealing to GE that it had GE’s trade secret in September 2020 in a letter “nothing to see here, people”, in which Siemens misrepresented and reduced the scope and impact of its illegal scheme, ”According to the declaration.
The application alleges that between May 2019, when the proposed unbundling was announced until its completion in September 2020, Siemens Energy was “strongly motivated” to secure as many energy contracts as possible in order to increase its financial prospects and to increase its estimated share price before its initial public offering.
He claims that trade secrets relate to at least eight other gas turbine contracts “unfairly won” by Siemens Energy over General Electric during the 16-month period before the German company notified GE. He added that the secrets were still relevant to the pending contract in South Carolina, for which the two companies were competing, adding that the company “firmly refused” to ensure that GE’s secrets were destroyed.
Overall, the theft is said to have allowed Siemens to win “billions of dollars” in contracts at the expense of GE’s ability to compete fairly.
Citi analysts said the lawsuit was negative for the mood of Siemens Energy, which has recently been among the best performing sectors, while noting that litigation can be time consuming.
“However, in terms of stock price sensitivity, a $ 1 billion fine – potentially at the top of the possible scenarios – would be around € 1.1 / share, or a 3% hit to the January 14 closing price. They said. “This must be seen in the context of the> 50% increase in Siemens Energy’s share price over the last three months,” they added.
Siemens Energy said it had not yet formally received the lawsuit, but had learned about it through media reports.
A spokesman said To Barron the company identified the use of trade secrets “through its own robust compliance processes” before conducting an internal investigation and disclosing the findings of both Dominion and GE.
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The company said it had taken “extensive corrective action” in response, disciplining affected employees – including spin-offs – removing “confidential competitor information” from all of its systems and providing additional compliance training for all US employees.
“The integrity of Siemens Energy is at the heart of our operating principles and will not be violated under any circumstances,” the spokesman added.
A GE spokesman said: “At GE, we aggressively defend and defend our intellectual property. As this trial continues, we have no further comments at this time. ”
Dominion Energy declined to comment.