Bank chief acquittedin Mannesmann case

22nd July 2004, Comments 0 comments

22 July 2004, DUSSELDORF - Deutsche Bank chief executive Josef Ackermann and all five other defendants were acquitted Thursday in one of Germany's biggest business trials on charges that they improperly paid bonuses to executives of a mobile-phone company.

22 July 2004

DUSSELDORF - Deutsche Bank chief executive Josef Ackermann and all five other defendants were acquitted Thursday in one of Germany's biggest business trials on charges that they improperly paid bonuses to executives of a mobile-phone company.

The court ruled that there was no authority under German stock law for such bonuses, but nobody had committed a crime.

"I am very gratified to see that the court agreed that all of these allegations were null and void," Ackermann said outside the court. The head of Germany's biggest bank had been accused of breach of trust while he was a member of the board at Mannesmann.

The German conglomerate, which in a few short years remade itself from an engineering group into Germany's biggest cellphone operator, succumbed in 2000 to a hostile takeover bid by Vodafone of Britain.

The former Mannesmann chief executive, Klaus Esser, who received half of a nearly EUR 60 million package of bonuses for retiring executives and was charged as an accessory, declared himself vindicated.

"This is an unambiguous message," he said. "I behaved rightly."

But legal commentators said a finding by presiding judge Brigitte Koppenhoefer that retroactive bonuses were not authorised by German stock law could be a warning to the corporate world to plan incentives for executives more carefully in future.

They said Mannesmann would never sue for the money back, because it was now a subsidiary of Vodafone.

A prosecution spokeswoman said outside the court there would be a review of whether to appeal before the deadline expires in one week.

The six-month-long trial triggered a political debate in Germany about the high levels of executive pay, with Justice Minister Brigitte Zypries saying Wednesday she would seek full disclosure of top salaries to shame business leaders into restraint.

Koppenhoefer complained Thursday at interference in the trial by business and political leaders who claimed the trial would frighten investors away from Germany.

She said judges had also received heavy-breathing phone calls, spiteful letters and death threats from people who saw the court as pro-business.

"We are not an inquiry into the German economy. We are a criminal court for business offences," she said. The judges were not there to consider moral issues, she said, but only whether a crime had been proven.

She said allegations that the big bonus had influenced Esser into surrender after months of resisting the takeover had not been proven.

"Suppositions don't suffice," she said.

Joachim Funk, who was chairman of the company's supervisory board, was among those acquitted, alongside Ackermann and Klaus Zwickel, former chief of the metalworkers union IG Metall, who both sat on the board.

Two lesser-known figures, Juergen Ladberg who was head of Mannesmann's employees council, and the former personnel director, Dietmar Droste, were also acquitted.

The judge confirmed Thursday her preliminary finding in March that no crime had been proven, even though the defendants might possibly have been liable for civil damages. She said Funk broke the law by voting on a bonus for himself, but he could not be convicted because he had relied on wrong legal advice and later corrected the move.

Prosecutors, who had demanded jail terms of up to three years, claimed that the bonuses, paid to an inner circle of top staff, harmed Mannesmann as an institution, because the venerable company gained no benefit from the expenditure.

Instead it was broken up, surplus staff were laid off and its brand name is now used by a maker of cheap home-handyman tools.

DPA

Subject: German news

0 Comments To This Article