Germany charges six in Vodafone takeover case

Klaus Esser, the former head of Germany's Mannesmann, along with five others was yesterday charged with taking illegal payments relating to the $200bn (£125bn) takeover of Mannesmann by Vodafone.

German prosecutors, who started investigating the payment of the awards about a year-and-a-half ago, confirmed yesterday that they had charged the six although the prosecutor's office said it would not name the defendants or the charges before all parties had been contacted by the court. The German Justice Ministry has previously said the defendants are suspected of embezzlement.

In addition to Mr Esser, the accused are said to include Josef Ackermann, the chief executive of Deutsche Bank, as well as Klaus Zwickel, the head of the influential German industrial union IG Metall.

The other three men are thought to be Dietmar Droste, the former Mannesmann personnel chief, Joachim Funk, the ex-supervisory board head and Juergen Ladberg, the former works council chief.

All six could face prison sentences of up to two years if convicted. But a spokesman for the Düsseldorf court said yesterday it could be months before a decision is taken on whether to admit the case.

The prosecutor, Joseph Wassen, said: "The charges are now at the court and the court will examine them and probably send them, then the defendants have the right to challenge them before the court officially opens the case. That can take months."

The prosecutor's investigation centred on the payments and bonuses that the six men were awarded after Mannesmann eventually capitulated to Vodafone's hostile bid in 2000 after months of wrangling.

Mr Esser, who was awarded a 60m German mark (£21m) payout, confirmed yesterday that he had been charged but reiterated he had done nothing wrong.

"The suit is unfounded, the truth is simple: I conducted myself properly in the takeover battle," Mr Esser said. "There isn't the slightest suspicion for any kind of unlawful negotiation from me."

He has filed a civil suit against the Düsseldorf prosecutors and is seeking damages and compensation for personal suffering from the state of North Rhine-Westphalia because of the investigation.

Vodafone refused to comment on the case yesterday. Nor would the operator comment on reports that it is being sued for up to £33m by Australia's Mobile Innovations, one of its service providers.

A spokesman for Mobile Innovations said the company is claiming Vodafone is trying to destroy its business, alleging it has been "screwed in order to drive the profits of Vodafone".

The action has been launched against Vodafone Australia in Sydney. Mobile Innovations was set up in 1994 and resells airtime on the Vodafone network. It manages about 105,000 Vodafone contract customers.

Stephen Klotz, the lawyer representing Mobile Innovations, said a legal team would argue that Vodafone's actions had "irreparably damaged" the firm.