Ackermann has no criminal charge to answer

Josef Ackermann should be able to keep his job Keystone

A German court has thrown out criminal charges against the Swiss boss of Deutsche Bank, Josef Ackermann, for breach of shareholder trust.

The judge said there was no basis for a criminal case against Ackermann and others, who are accused of paying big bonuses to push through a business deal.

Following a mid-trial judicial review with the defendants’ lawyers and state prosecutors, judge Brigitte Koppenhöfer said the prosecution would need to come up with fresh evidence to make the charges stick.

The case concerns allegations that Ackermann and five other former directors of the German mobile phone firm, Mannesmann, overpaid company executives when the company was taken over by Britain’s Vodafone four years ago.

The judge said there was evidence of lesser legal violations of share law, but that the key allegation – that the defendants had wasted shareholders’ money – had not been shown to be criminal.

Prosecutors alleged that former Mannesmann boss Klaus Esser and other executives, including Ackermann, broke criminal law by authorising bonuses and retirement packages totalling $70 million (SFr89 million) to Mannesmann executives.

Illegal

Esser, who personally received the equivalent of $27 million, and board chairman Joachim Funk are accused of agreeing to “illegally enrich themselves” at the company’s expense before dropping their opposition to the deal.

A court spokesman said the prosecutor would pursue the action and that the trial would continue.

But correspondents say the judge’s comments mean that Ackermann’s position as Deutsche Bank chief executive appears no longer to be under threat.

If the final court decision had gone against him, Ackermann faced a fine or prison term and would likely have had to step down from the board of Germany’s biggest bank.

Deutsche Bank declined to comment on the judge’s remarks.

Last week, former Vodafone boss Chris Gent told the court that it had been capital markets and not the payments to Mannesmann managers that had been the deciding factor in the acquisition of the company.

Fair reward

The judge said the bonuses were contrary to civil securities law because they did not benefit the company.

But she added that the payments were in line with common business practices and represented a fair reward for the executives’ work in making Mannesmann a successful company.

The provisional decision by the court has implications for the way in which German companies reward their top management.

German executives typically earn far less than their American and British counterparts, and many observers saw the trial as a test of a company’s right to award big payments.

It had been feared that had the court slapped charges on those involved in the Mannesmann case, it would have discouraged companies from doing business in Germany.

swissinfo with agencies

In brief

Josef Ackermann, 55, is the chief executive and chairman of Deutsche Bank. He is accused of committing a breach of trust.

The trial relates to a hostile takeover by Britain’s Vodafone of the German industrial conglomerate, Mannesmann, in 2000.

Ackermann and five other former executives at Mannesmann are accused of failing to act in the interests of shareholders when they approved the takeover.

The case focuses on some SFr90 million paid to Mannesmann executives as “appreciation awards” following the SFr280 billion takeover.