The heads of Mannesmann and Deutsche Bank were yesterday cleared of corruption over the company's controversial merger with Vodafone in 2000, in a court ruling that provoked vitriolic condemnation from senior German government figures.
A court in Düsseldorf acquitted Josef Ackermann, the Deutsche Bank chief executive, Klaus Esser, Mannesmann's former chief executive, and four other co-defendants from the Mannesmann board, of illegally approving bonus payments worth $74m (£40m) to company executives after the $180bn takeover three years ago.
Mr Ackermann, a member of the Mannesmann supervisory board who signed off on the payments, welcomed the verdict saying that all allegations that he and his co-defendants were bribed into accepting the merger had been proven groundless. "Acquittal is acquittal," he said.
But the ruling provoked furious criticism from senior government figures. Wolfgang Thierse, the country's Social Democrat Parliamentary President, said: "The self-service mentality of Mannesmann's executives is by no means justified simply because they cannot be pursued by the courts. Their behaviour was plainly indecent."
Other senior Social Democrat politicians said Mr Ackermann and the Mannesmann executives were guilty of "shameless self-enrichment" and described the takeover deal as one of the "worst scandals in German corporate history". The six-month court battle, estimated to have cost about €20m (£13m), also ended with an attack by the presiding judge who accused German politicians, state prosecutors and business leaders of issuing threats, manipulating the media and resorting to "telephone terror" to influence the proceedings.
Judge Brigitte Koppenhöfer told the court: "I have spent 25 years in the legal profession, but I have never experienced anything like what happened during this trial. I have received threatening letters, been terrorised on the phone and witnessed deliberate attempts to influence the proceedings."
Judge Koppenhöfer declined to name individuals but said: "Even politicians issued statements in which they invented criminal offences such as 'obscenity and perversion'. I am used to defence lawyers using the press to influence proceedings but in this trial the prosecution did so."
Vodafone's buyout of its German mobile phone rival was one of the largest mergers in European corporate history. The deal was criticised in Germany as a glaring example of cut-throat Anglo-US capitalism. Gerhard Schröder, the Chancellor, described it as being out of step with German business practice. The bonuses paid out to Mannesmann's board members were astronomical in a country where chief executives rarely earn more than $2.5m.
Before the verdict, demonstrators crowded outside the Düsseldorf court brandishing placards that read: "The rich are let off - the poor must pay."
State prosecutors alleged that the accused - including Klaus Zwickel, the former IG-Metall union boss, Joachim Funk, the Mannesmann chairman, Jürgen Ladberg, an employee representative, and Dietmar Droste, the former personnel chief - had failed to safeguard Mannesmann assets. The defendants were charged with breaching their fiduciary duty to the company by agreeing to the bonuses. Defence lawyers said the bonuses were appropriate reward for increasing Mannesmann's share value by 136 per cent after the takeover.
Clearing the six accused of charges of breach of trust and abetting breach of trust, Judge Koppenhöfer summed up: "We are not sitting in judgement on German corporate culture, though the evidence that was heard provoked astonishment."
Prosecution lawyers said they were considering an appeal at Germany's Federal Court, which could take years.Reuse content