Thyssen bosses arrested over pounds 30m metals fraud

German steel scandal: Executives granted pounds 1m bail after police swoop in Dusseldorf

The chairman of Thyssen, Dieter Vogel, and nine other senior executives at the German steel giant have been arrested in a series of police raids linked to pounds 30m fraud over an east German metals trading company.

Detectives searched the homes of several of the arrested men, including Mr Vogel, together with Thyssen's head office in Dusseldorf, for evidence linked to the alleged fraud. Other offices throughout Germany were sealed by police officers and will be searched later.

By late last night, nine of the arrested men, including Mr Vogel, had been released on bail of up to pounds 1m. Mr Vogel appeared briefly before a court in Dusseldorf, where charges were read out.

Shares in Thyssen fell by more than 2 per cent to DM262.2 on the Frankfurt exchange on news of the arrests.

They follow an investigation into Metallurgiehandel, an eastern German metals company bought by Thyssen after German reunification in 1990.

Prosecutors allege both that managers at Thyssen took DM37.8m (pounds 15m) from Metallurgiehandel when it was sold and that a further DM32.2m of damages was caused by manipulating the company's accounts.

Among the other arrests are former Thyssen chairman Heinrich Kersten, and directors Josef von Riedere and Hans Ulrich Gruber.

Berlin prosecutors have been investigating whether Thyssen defrauded the Treuhand privatisation agency in charge of privatising eastern German enterprises.

A separate investigation was launched in 1993 and shelved after Thyssen paid compensation worth pounds 35m to Treuhand.

Analysts yesterday said the arrests were a fall-out from the kind of free-wheeling deal typical in the heady days just after German reunification in 1990.

The case is similar to that of Bremer Vulkan, the biggest German shipbuilder. Bremer Vulkan sank after allegedly covering losses at its Western operations by siphoning off public subsidies earmarked to refurbish its eastern German wharves.

The giant steel-maker said in a statement: "The action of the state prosecutor is incomprehensible. There have been no new facts or evidence since the case was suspended in October 1993."

The company said the arrests had allegedly been made to ensure the managers concerned could not flee the country: "But the fact that most of those concerned interrupted their holidays to make themselves available for questioning means that the fears are absurd." Thyssen added that it would fight the charges with all legal means at its disposal.

The company was indirectly backed by Treuhand, which it allegedly defrauded. A spokesman said: "The case is effectively closed for us."

In 1990, as the Treuhand strove to maintain jobs while selling off state- run enterprises in the formerly communist east, it acted hastily to strike deals with buyers in the interest of protecting jobs.

Treuhand contacted Thyssen in December 1990 to break up Metallurgiehandel, the eastern German state monopoly that controlled foreign trade of metal products.

Like shipbuilder Bremer Vulkan, but on a much smaller scale, Thyssen may have gone too far in trying to squeeze the best deal out of its acquisition of Metallurgiehandel.

"Everybody was trying to shelter themselves from losses," said Olaf Toelke, an analyst at Merrill Lynch.

"They paid little for companies, sometimes only a token price of one mark, but they guaranteed employment."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
science
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
News
Comedian Ted Robbins collapsed on stage during a performance of Phoenix Nights Live at Manchester Arena (Rex)
people
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links