Banks sack board of Metallgesellschaft

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The Independent Online
GERMANY'S big banks demonstrated their industrial power yesterday by sacking virtually all the management board of Metallgesellschaft, the metals and environmental technology group.

As shareholders and creditors, Deutsche and Dresdner banks used the extraordinary meeting of MG's supervisory board to throw out Heinz Schimmelbusch, chief executive, Meinhard Forster, chief financial officer, and four other board members. Mr Schimmelbusch was named German Manager of the Year in 1991 and praised for bringing a dynamic new style into the staid German corporate world.

The new chief executive of the group is Kajo Neukirchen, one of Germany's best-known turnaround specialists, who has a reputation as a merciless cost-cutter.

MG, pushed by the recession and over-ambitious expansion in the early Nineties into a DM347m pre-tax loss in 1993, faces a liquidity crisis over its oil trading business in the US. Two weeks ago, it called on its banks to provide an estimated DM2bn to cover cash payments on oil futures contracts in New York.

The supervisory board decided it had not been properly informed by management of the problems. It said that the 1993 loss would probably have to be revised in the light of investigations into MG's North American activities.

Deutsche and Dresdner said they would discuss future financing ideas as soon as possible.