No crime apparent in Mannesmann case
1 April 2004 , DUSSELDORF – A German judge said Wednesday that no crime was apparent to her from the evidence brought so far in the trial of business executives involved in Vodafone's 2000 Mannesmann takeover.
1 April 2004
DUSSELDORF – A German judge said Wednesday that no crime was apparent to her from the evidence brought so far in the trial of business executives involved in Vodafone's 2000 Mannesmann takeover.
The bonuses paid to senior Mannesmann staff were wrong under German company law, because they did not serve Mannesmann's interests, but that did not amount to a breach of fiduciary trust.
The judge’s comments raise the prospects of an acquittal for the executives in the case, which include Deutsche Bank chief Josef Ackermann.
But prosecutors said after the conference in court with judge Brigitte Koppenhoefer that they would press ahead with trying to prove that Ackermann committed a breach of trust while a member of the Mannesmann board.
He and four other men are accused of wrongly approving a EUR 60 million package of bonuses to the sixth defendant, Klaus Esser, and other outgoing Mannesmann executives. All the men deny the charges, saying the bonuses were a just reward.
The share price of the German phone company doubled before it surrendered to British-based Vodafone in history's most expensive takeover.
The 11-week-old Mannesmann trial has underlined the differences between the traditional European view of a company as a virtual "person" and the American view that a firm is just a vehicle for shareholders to make money with.
Leaning to the traditional view, Koppenhoefer said the bonuses had not served the enterprise's interests.
But she said more was needed to convict the defendants of breach of trust. Since the defendants had obtained legal advice and acted on it, they appeared to be innocent, legally speaking.
In her statement after a two-hour conference behind closed doors with the prosecution and defence, Koppenhoefer stressed that some legal issues still had yet to be explored, and the trial was not over yet.
Outside the court, Esser said she had taken a "very good step in the right direction" and reinforced his trust in German justice. He was granted the biggest bonus of EUR 15 million.
The judge said there had been one "grave" breach of duty, in paying a bonus of EUR 3.1 million to retiring supervisory board chairman Joachim Funk, but because of the legal advice, the defendants were unaware they were doing wrong.
Sven Thomas, Esser's lawyer, said the statement contained everything he had hoped. He said he hoped it meant quicker progress to a verdict, but that would depend on the attitude of prosecutors.
Once an old-fashioned engineering company, Mannesmann built one of Germany's leading mobile-phone network. After the takeover Vodafone put its own brand on the phones and sold the engineering interests.
German business leaders have roundly criticized the trial, saying the courts ought not to review entrepreneurial decisions.
Legal analysts said Koppenhoefer's view of the case might encourage civil suits for damages against Esser and the other defendants by small shareholders, who could argue that the surplus funds should have been ploughed back into the business.
Subject: German news