Zumwinkel's career in ruins months before retiring

17th February 2008, Comments 0 comments

Just months short of retirement, the Deutsche Post chief was surveying an illustrious career in ruins after being accused of a tax scam worth 1 million euros.

Berlin -- Just six months ago, Deutsche Post boss Klaus Zumwinkel posed as the protector of worker interests, slamming untrammeled competition in the European postal market and resultant wage dumping.

On Friday, just months short of retirement, he was surveying an illustrious career in ruins after being accused of a tax scam to the value of 1 million euros (1.5 million dollars).

Prosecutors graciously lifted an arrest warrant -- after Zumwinkel had posted a bond referred to as "not inconsiderable" -- and allowed the 64-year-old to go home.

In August, as he presented figures showing rising profits at the global logistic concern he had helped create, Zumwinkel had weighed into EU bureaucrats of creating "a true mess" in their attempts to liberalize the European postal market.

He referred to the "unparalleled slashing of worker benefits" and demanded the rapid introduction of a minimum wage to halt the decline.

The Deutsche Post chief executive spoke with the voice of authority. Appointed to head the company in 1990, he had piloted the former state-owned loss-maker to a highly profitable logistics concern with global reach.

His position at the head of a company employing 520,000 and turning over more than 60 billion euros (88 billion dollars) a year put him right at the top of the league of German business leaders.

On Friday, Zumwinkel's resignation was announced following dramatic raids by prosecutors from the fraud office on his luxury home and his office.

The announcement came obliquely, when Torsten Albig, spokesman for Finance Minister Peer Steinbrueck told journalists at the routine government press briefing that his boss welcomed Zumwinkel's decision.

Few doubted that the Deutsche Post head had been pushed. The company statement issued on Thursday that the boss would remain at his post had drawn incredulity all round.

Politicians called for Zumwinkel's head -- the German state still owns around 30 percent of the company -- and leading writers bemoaned the decline in German business standards, writing of "unbridled greed" and "moral vacuum."

Chancellor Angela Merkel voiced her personal criticism, regretting the fact that Zumwinkel had failed "to express himself publicly on the allegations," in the words of her spokesman, Ulrich Wilhelm.

On Friday, the company backtracked. Zumwinkel would offer his resignation "in the interests of the company," it said. Acceptance by the board meeting on Monday was a foregone conclusion.

The news filtering out of the prosecutors office in the city of Bochum was ominous for the executive, who also sits on the supervisory boards of Deutsche Telekom, Lufthansa, Allianz and other household names in Germany.

The probe had been running for around a year, with the assistance of the federal intelligence services. An entire Liechtenstein bank had been "cracked" according to one investigator.

And hundreds more prominent Germans were being probed in connection with stashing surplus millions in foundations in the tax haven, the prosecutors said.

Steinbrueck spokesman Albig could not suppress a smirk as he advised those concerned to file corrected returns detailing their tax evasion -- a device known as "self-reporting" under German law and aimed at allowing offenders to reduce possible penalties.

The damage to the image of German business is immense. In December Merkel, whose party is normally seen as pro-business, had lashed out at executive "payouts in the realms of fantasy" as public anger rose at executive's soaring pay while ordinary workers took cuts.

As demanded by Zumwinkel, her government pushed a bill through parliament at the end of last year enforcing a minimum wage in the postal sector in a move that undercut new competitor companies and boosted Deutsche Post's shares.

Zumwinkel took his chance and sold shares to the value of 4.7 million euros for a considerable profit, shrugging off the ensuing furor.

There was little sympathy in Germany at his demise, and even wry amusement that the prosecutors were looking into the relatively modest sum -- by Zumwinkel's own standards -- of just 1 million euros.

DPA with Expatica

0 Comments To This Article