German businessleaders in the dock
21 January 2004
DUESSELDORF – Long-awaited proceedings got underway before a court in Germany Wednesday into Vodafone’s takeover of Mannesmann in which the Deutsche Bank chief Josef Ackermann is expected to take the stand.
The case also involves Germany’s biggest ever hostile corporate takeover, when Vodafone acquired the German industrial group Mannesmann AG four years ago.
The first day of proceedings was brief, with the prosecution reading out the charges of before the defence moved for a recess on a technicality.
Ackermann is accused of improperly authorizing DM111 million in payouts to executives of Mannesmann, which operated a successful German phone company that has now been absorbed into the Anglo-American Vodafone.
Also on trial are five other businessmen, including Klaus Esser, the former Mannesmann chief executive, who has since become a partner in General Atlantic, the venture capital business.
Ackermann’s lawyer, Eberhard Kempf, conceded in an interview with the German weekly newspaper Die Zeit that his client had made one mistake during his tenure on the Mannesmann supervisory board.
Kempf told Die Zeit, which is due to hit the streets Thursday, that Ackermann had failed to prevent supervisory board chairman Joachim Funk from casting a vote at a 4 February 2000 meeting authorizing Funk’s own bonus.
“That was a mistake you make when busy, and Ackermann says, ‘I should have noticed it, but I didn’t catch it at that moment’.”
Kempf said the error was not enough to find Ackermann guilty because the committee again met on 17 April 2000 and confirmed the payment of EUR six million to Funk without Funk voting.
But in remarks to reporters ahead of the court heading, Ackermann roundly criticised Germany’s laws as one the nation’s biggest-ever corporate legal cases.
“This is the only country in the world where successful people who create value are hauled before the courts over this sort of thing,” he said.
“I’m certain the verdict will be that I did the right thing,” said Esser outside the court.
Under the regular German penal code, the defendants are accused of breaching their fiduciary duty to the Mannesmann company by paying out disproportionate rewards to executives.
[Copyright DPA with Expatica]
Subject: German news