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Siemens Energy
the stock fell on Friday after
General Electric
sued the German company for allegedly stealing trade secrets that it claims were used to win billions of dollars worth of contracts.
Shares in the company, a spinoff of
Siemens
the one listed in September last year was 6.3% lower in early trading. Despite the fall, the stock continued to grow by 44% since its listing.
The lawsuit, filed Thursday in a U.S. district court in Virginia, claims that Siemens Energy obtained the trade secrets of the American giant when both companies competed for a gas turbine contract for the Virginia electricity company.
Energy Dominion
in May 2019. He claims that a senior Dominion employee shared the details of GE’s contract offer with a Siemens employee, who then shared the trade secrets with “dozens” of colleagues, including those responsible for Siemens’ own offer.
Read:GE’s action won’t go anywhere in 2021. That’s why JP Morgan is still doing it.
These secrets were then used to improve Siemens’ own offering, eventually winning the contract worth between $ 225 and $ 340 million, according to the lawsuit. Composing this injustice, Siemens then waited 16 months before revealing to GE that it holds GE’s trade secrets in September 2020 in a letter “nothing to see here, folks,” in which Siemens distorted and downplayed application and impact of its illegal scheme, ”According to the file.
The lawsuit alleges that in May 2019, when the split proposal was announced until its completion in September 2020, Siemens Energy was “extremely motivated” to secure as many energy contracts as possible in order to increase its financial prospects and increases the price of the shares planned before its initial public offering.
He claims that trade secrets are relevant to at least eight other gas turbine contracts “wrongfully won” by Siemens Energy against General Electric in the 16 months before the German company notified GE. He added that the secrets were still relevant to the award of a pending contract in South Carolina, being competed by the two companies, adding that the company “firmly refused” to ensure GE’s secrets were destroyed.
In total, he claimed that the theft allowed Siemens to earn “billions of dollars” in contracts to the detriment of GE’s ability to compete fairly.
Citi analysts said the lawsuit was negative for sentiment about Siemens Energy, which has been among the best performers in the industry recently, while noting that litigation can take a long time.
“However, in terms of stock price sensitivities, a $ 1 billion fine – potentially at the top end of possible scenarios – would amount to around € 1.1 / share, or a 3% success at the closing on January 14, “they said. “This should be seen in the context of a> 50% increase in the price of Siemens Energy shares in the last three months,” they added.
Siemens Energy said it had not yet been officially notified of the lawsuit, but learned of it through media reports.
A spokesman said Barron’s 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.
Read:Siemens shuts down its power supply. What does that mean for GE Stock.
The company said it has implemented “extensive remedial action” in response, disciplining the employees involved – including separation from the company – removing “competitor’s confidential information” from all of its systems and providing additional compliance training to all U.S. employees.
“The integrity of Siemens Energy is fundamental to our operating principles and will not be compromised in any way,” the spokesman added.
A GE spokesman said: “At GE, we aggressively protect and defend our Intellectual Property. As this dispute is ongoing, we have no further comment at this time. ”
Dominion Energy declined to comment.