Thyssen chief stays on despite pounds 30m scandal

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The chairman of Thyssen, the German steel giant, has vowed to stay on in his job despite being arrested last week in connection with a pounds 30m fraud probe.

In an interview published today in Der Spiegel, the respected weekly news magazine, Dieter Vogel says: "I plan to perform the duties of my office for quite some time." He went on to call the Berlin prosecutor's actions "outrageous".

Mr Vogel and nine other managers at Thyssen and the east German metals company Metallurgiehandel were arrested as part of an investigation into allegations they had defrauded the Treuhand privatisation agency.

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. All but one of the managers were later released on bail of up to DM2.5m (pounds 1.69m).

The arrests followed an investigation into Metallurgiehandel, which was bought by Thyssen after German re-unification in 1990.

Noting that he and his colleagues had offered to co-operate with authorities in the investigation, Mr Vogel says: "I cannot comprehend the accusations and the actions."

The arrest warrants had been based on suspicions that the executives would flee Germany, but Mr Vogel said several of them actually interrupted vacations abroad to respond to authorities.

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

Prosecutors allege that Thyssen managers took DM37.8m from Metallurgiehandel when it was sold and say that a further DM32.2m of damages was caused by manipulating accounts.

Thyssen reportedly charged the Treuhand questionably high rates for retraining eastern workers. In some cases the training might not have taken place.

Mr Vogel told Der Spiegel that no new facts or evidence had surfaced since the case was suspended on 22 October 1993. Thyssen and BvS, the Treuhand's successor agency, reached a settlement in 1995 under which Thyssen paid DM86.6m. The investigation was re-opened in May.

Thyssen called the arrest warrants illegal and said it would fight the accusations with all legal means at its disposal.