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
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones