A German court has approved a deal to end the retrial of the Swiss head of Deutsche Bank, Josef Ackermann, in a case that had threatened his career.This content was published on November 29, 2006 - 12:01
Ackermann, 58, and five others were involved in a case about bonuses paid at German telecoms firm Mannesmann more than five years ago.
The retrial concerned alleged breach of trust in approving almost €60 million (SFr95.4 million) to executives of Mannesmann after the company was bought by Vodafone in one of the biggest takeovers ever.
Under the terms of the agreement approved by the Düsseldorf court, Ackermann will pay €3.2 million but not admit guilt. Total payment from the defendants is €5.8 million.
Prosecutors had said the payment was not a fine and "the presumption of innocence remains valid".
Ackermann – a former CEO of Credit Suisse – had said he would step down at Deutsche Bank if found guilty in the drawn-out court case.
Deutsche Bank's supervisory board welcomed the end of the trial, saying Ackermann was now once again free to devote himself fully to the bank.
In a statement, it said the ending of the case confirmed the board's opinion that Ackermann had acted "correctly and objectively at all times" in the performance of his mandate.
It also thanked Ackermann for his readiness to make a "non-penal payment" which had spared Deutsche Bank a trial, "the duration of which would otherwise have been unforeseeable".
One of Ackermann's lawyers, Klaus Volk, told journalists at the court: "This is a good day."
The charges related to Ackermann's membership of the board of Mannesmann at the time of the takeover. The prosecution's case was that they had illegally engineered the bonuses.
But the defence rejected the charges of breach of trust, arguing that the payments to Mannesmann bosses were appropriate compensation for driving a hard bargain and securing a better price for shareholders during the takeover battle.
Prosecutors contended that the defendants had violated an obligation to be good stewards of the company's money.
The deal struck on Wednesday foresees 60 per cent of the €5.8 million going to the state and 40 per cent to charity.
Ackermann and his co-defenders were acquitted at a first trial in 2004 but after an appeal by prosecutors the federal court last December ordered a retrial.
Ackermann received no money himself and his activities at Deutsche Bank were not part of the trial.
Hans-Peter Burghof, professor of economics at Hohenheim University in Germany, told swissinfo that the verdict was "sensible".
"The prosecutors obviously must have realised at some point during the trial that it was simply not possible in this case to clarify the facts – and they then sensibly said: 'Right, we're now going to give up'."
Burghof warned however that "the question hasn't been resolved in Germany whether such bonuses are permissible".
As for what effect, if any, the verdict would have on the economy, Burghof believed executives would become a lot more careful. "They now risk being punished for bad decisions when things start getting rough."
He added that executives would no longer wave around generous incentives during takeovers, which in turn would be bad for the German economy because management would be less prepared to take risks.
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 Mannesmann senior figures, Ackermann was accused of failing to act in the interests of shareholders when the takeover was approved.
Josef Ackermann biography
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 what is now Credit Suisse four years later.
From 1993 to 1996 he headed the bank.
In 2002 he was made head of Deutsche Bank, the first non-German to hold the post since the bank was founded in 1870.
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