Siemens Under Scruntiny

Kleinfeld, who is 49, told a meeting of the company's supervisory board that he did not want to extend his current contract, which expires at the end of September, after facing resistance to the extension among board members.

"The company needs clarity with regard to its leadership during these times," Kleinfeld said. "I have therefore decided not to make myself available for an extension of my contract."

His successor has not been named.

Kleinfeld refused to accept the board delaying a vote on the contract, company officials said, as a result paving the way for a major shakeout in the group's top management.

His decision to leave the company after a two-decade career followed last week's dramatic announcement by Siemens chairman Heinrich von Pierer that he was resigning.

Slush-fund probe

Although cleared of any wrongdoing, Kleinfeld's future had hung in the balance as the Siemens' board considered whether far-reaching changes of the group's management were necessary to help give the group a new start as it contended with an ongoing slush-fund probe.

Ahead of Wednesday's meeting, German media had reported that supervisory board members had started a search for a possible successor for Kleinfeld as part of a push for a major shakeout of the company's top management.

Despite launching an internal company investigation into recent scandals and stepping up corporate control procedures, Kleinfeld has come under fire for failing to act sooner in dealing with allegations of corruption.

This included claims that funds totaling as much as 420 million euros ($573 million dollars) had been siphoned off into illicit accounts over the last seven years.

Won praise

During his two years at the helm of Siemens, Kleinfeld has also won plaudits from investors for his efforts to boost the company's finances through big cuts in the company's workforce and a major acquisitions drive.

Siemens' shares edged down 0.94 percent to 88.36 euros as trading drew to a close Wednesday.

The almost Herculean task of steering Siemens out of the crisis that has engulfed the company in recent months now falls on German steel giant ThyssenKrupp AG's chairman Gerhard Cromme, who is to takeover as board chairman from von Pierer.

Ending his long career with the company, von Pierer insisted he was not taking personal responsibility for the scandals that have badly shaken the company. These included allegations that members of management channeled funds into an employer-friendly labor group.

At the helm

66-year-old von Pierer had presided over the company's management both as chief executive and then as chairman during the time the corruption was alleged to have taken place.

Von Pierer stepped aside as chief executive in 2005 to make way for Kleinfeld, who was his protégé.

The scandals have, however, also largely overshadowed Siemens' recent solid financial performance.

Data released Tuesday evening by the company showed second-quarter net profit surged 36 percent to 1.259 billion euros. This beat analysts' forecasts of a rise to 1.193 billion euros.

The group said revenues jumped 10 percent in the quarter to 20.626 billion euros.

At the same time, Siemens said orders increased nine percent to 23.469 billion euros, while group profit climbed 49 percent to 1.964 billion euros.