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Fri, Jul 23, 2004 - Page 12 News List

Germany's top banker acquitted

MANNESMANN BUYOUT Josef Ackermann and five co-defendants were acquitted of criminal charges over payments to executives during a telecom takeover battle


Deutsche Bank chief executive Josef Ackermann, right, is congratulated as he stands in the district court in Duesseldorf, Germany, yesterday. Ackermann, former Mannesmann chief executive Klaus Esser, left, and four others were acquitted of criminal charges yesterday stemming from a 2000 telecom takeover battle.


Deutsche Bank chief executive Josef Ackermann and five others were cleared by a German court yesterday of charges they illegally overpaid executives after Europe's biggest company takeover.

The judge told a crowded Duesseldorf courtroom that Ackermann and his co-defendants were free to leave, after more than six months of hearings in what has been highest-profile trial in German corporate history.

"In this criminal process it is not up to the court to make management decisions or moral or ethical judgements," said Judge Brigitte Koppenhoefer, sending a strong message of support that courts would not meddle in German business pay.

"We are not judging German corporate culture although the evidence we saw was puzzling at times," she said.

"One does not have to believe everything the defendants said. But one also cannot impugn them in every way, either," she said.

On trial along with Ackermann since Jan. 21 were former Mannesmann chief executive officer Klaus Esser, former board chairman Joachim Funk, former Mannesmann personnel chief Dietmar Droste and two more board members -- Juergen Ladberg, an employee representative, and Klaus Zwickel, the retired head of the IG Metall industrial union.

Although he received no money himself, Ackermann, who was on the Mannesmann board at the time and signed off on the payments, was charged with breach of trust along with Funk, Zwickel and Ladberg. Esser and Droste faced charges of abetting a breach of trust.

The defendants had denied charges of criminal breach of trust in approving 60 million euros (US$74 million) in payments to executives when German company Mannesmann was taken over by Britain's Vodafone. Though hardly unusual in many other countries, the payments were considered astronomical in Germany.

The judge's decision had been expected following a mid-trial statement at the end of March when she effectively dismissed the charges, saying the prosecution had failed to prove their case.

In the March statement, how-ever, she said that company rules may have been broken when Ackermann and others approved the payouts after the takeover was sealed. She may elaborate in her full judgment later yesterday on how the corporate code was broken -- a move which would deal a blow to Ackermann's reputation.

Ackermann also faces an appeal by the prosecutors, who had intended to stick to their demand for a two-year suspended sentence for breach of fiduciary duty.

Ackermann has criticized the investigation, questioning whether judges should be setting guidelines for executive compensation.

Despite the outcome, the trial -- which some observers estimate may have cost as much as 20 million euros -- has damaged both him and Deutsche Bank. Since the trial started in January, Ackermann has had to relocate to Duesseldorf, about 250km from his desk in Frankfurt, for up to two days a week, making it difficult to manage the bank.

A senior bank executive said Ackermann's was expected to focus more of his attention on the bank's future, including a possible merger.

"He has been out of the loop for quite some time. He has to go back on deck as quickly as possible," the executive said.

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