Ackermann faces Mannesmann retrial
The Swiss boss of Deutsche Bank has gone on trial for a second time over large payments to executives during a telecom takeover in Germany five years ago.
Josef Ackermann, who helped steer Germany’s biggest bank to record profits while cutting costs, has said that he will resign if found guilty.
The bank’s board of directors has stood behind him – as they did in his first trial, which ended in acquittal in 2004.
Ackermann arrived at the district court in the German city of Düsseldorf on Thursday accused of breach of trust regarding the approval of multimillion-euro bonus payments to executives in a 2001 takeover battle at telecoms company Mannesmann.
The charges do not relate to Ackermann’s activities at Deutsche Bank. Ackermann did not receive money himself, and has rejected the accusations.
But his style has often drawn criticism in Germany. The bonuses paid to departing executives at Mannesmann were viewed by many as excessive in a business culture that has not caught up with the big-money pay practices common in banking in the United States and Britain.
Deutsche Bank at one point attracted flak for announcing a healthy profit together with hefty job cuts.
In July 2004 Ackermann, a former member of Mannesmann’s board, and five others were acquitted of breach of trust over allegations that they illegally engineered payments to executives at Mannesmann after its takeover by rival Vodafone Group.
The €180 billion (SFr287 billion) deal was the largest corporate merger ever at the time. In all, bonuses and retirement packages of 150 million Deutschmarks (SFr122 million) to executives were approved.
Prosecution
The 2004 acquittal in Düsseldorf had been widely expected after the judge said in a mid-trial review at the end of March that year that there was no basis for a criminal case against Ackermann and the others.
She warned at the time that the prosecution would have to come up with fresh evidence.
Prosecutors had argued that a special severance payment of more than €15 million to former Mannesmann CEO Klaus Esser was not in the best interest of the company.
Ackermann’s attorneys argue the payment to Esser was a legitimate reward for increasing the values of the company’s shares leading up to the takeover.
After prosecutors appealed, the case was revived last December when the German Federal Court of Justice ordered a retrial.
The protracted legal proceedings have been a distraction as the bank strives to become more international in its reach while shoring up its position at home.
It is not immediately clear how long the retrial will last. The first trial dragged on for six months.
swissinfo with agencies
Josef Ackermann, 58, is the chief executive of Deutsche Bank.
His 2004 trial related to a hostile takeover by Britain’s Vodafone of the German mobile operator, Mannesmann, in 2000.
Along with five other former Mannesmann executives, Ackermann was accused of failing to act in the interests of shareholders when the takeover was approved.
He and his co-defendants were acquitted in July 2004.
Josef Ackermann was born on February 7, 1948 in Mels, canton St Gallen.
In 1973 he finished his studies in banking and economics.
He started working for banking giant Credit Suisse four years later.
From 1993 to 1996 he headed the bank.
In 2002 he was made head of Deutsche Bank, the first foreigner to hold this post since the bank was founded in 1870.
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