Six Face Charges In Mannesmann Takeover

The takeover battle filled pages and pages of German newspapers in the fall of 1999 as the British telecommunication giant Vodafone fought to take over the German Mannesmann company and Mannesmann battled to maintain its indepedence. Vodafone, led by chairman Chris Gent, finally won the fight in early 2000 in a deal that cost around 190 billion euros ($203 billion at today's rate).

But parts of the settlement unsettled German prosecutors in Düsseldorf. They questioned whether the severance packages that exceeded 100 million euros were legal. And on Monday, they ended a nearly two-year investigation by filing indictments against six people in a ground-breaking case that will explore the legal powers of company supervisory boards.

Names of defendants withheld

Prosecutors did not immediately release the names of the accused because the six had not received copies of the charges. But the case has the potential of becoming one of Germany's biggest business crime cases because some leading members of Germany's business and union communities are among those who have been under investigation. The group includes:

• Josef Ackermann, the chairman of Germany's biggest bank, the Deutsche Bank.
• Klaus Zwickel, the head of Germany's powerful union IG Metall.
• And Klaus Esser, the head of Mannesmann at the time of the takeover.

At issue is the severance and retirement package that Mannesmann executives received. Esser himself received a golden parachute of around 60 million marks (31 million euros). Prosecutors have said they think that there was no legal basis for the payments and that they caused severe financial damage to Mannesmann. As a result of these suspicions, they were considering whether to file charges of breach of trust and conspiracy.

Ackermann and Zwickel have been under investigation because they served as members of the Mannesmann board that approved the payments. After learning earlier this month that an indictment was likely, Ackermann defended the payments and said he would not resign if charges were filed.

Esser maintains innocence

Esser reacted angrily to the indicment. "There is not one shred of evidence showing I committed a crime," he said.

He also is seeking damages in a lawsuit against the prosecutor's office because he argues that prosecutors had no legitimate reason for opening their investigation.

The Deutsche Bank had no comment on the case on Monday, and the IG Metall said it expected that Zwickel would be quickly exonerated.