Deutsche boss battles to keep his job

GERMAN regulators are to meet tomorrow to decide whether Josef Ackermann can remain as chief executive of Deutsche Bank, Europe's largest bank.

Financial watchdog BaFin will have to rule whether Ackermann can continue in the job while fighting fraud charges connected to the Mannesmann-Vodafone bid battle almost four years ago.

Deutsche is standing by Ackermann so far, as he and others deny charges that they were enriched in the struggle to strike a deal that handed the German corporate crown jewel to the British company.

It says its senior management is convinced Ackermann acted 'honourably and professionally' and the case against him is 'misconceived'. A Düsseldorf court decided on Friday that it would proceed with a trial against him and others for their role in the awarding of huge bonuses linked to the takeover.

Ackermann was a member of Mannesmann's supervisory board at the time and was instrumental in granting payments although he did not receive one himself. Also under investigation are former chief executive Klaus Esser, former supervisory board chief Joachim Funk, and the former chief of the IG Metall labour union. Klaus Zwickel.

Ex-personnel chief Dietmar Droste and former works council chief Jurgen Ladberg are also charged. Prosecutors say Ackermann and the other former directors of Mannesmann are guilty of breaching their fiduciary duties by approving severance packages worth a total of e128m (£89m). Prosecutors also believe there was a conspiracy among managers to pave the way for the payouts in the days before the takeover became official.

However, much of the German Establishment is supporting Ackermann. Finance Minister Hans Eichel said: 'He has our full confidence.' No start date has yet been set for the trial but Ackermann could be removed by the regulators until the trial is over if they believe it would be in the best interests of the bank and its customers.

The saga has transfixed corporate Germany. 'There is so much riding on this for everyone, for the individuals, for the bank, for the entire German economy,' said Kurt Ziegler, economics commentator for Bavarian radio. 'It is an unprecedented case. A trial will have far-reaching implications for German business.'

KEY DATES
12 Nov 1999: Vodafone says it is seeking to 'develop' its relationship with Mannesmann.

14 Nov 1999: Mannesmann rejects $107 billion all-stock offer from Vodafone.

7 Dec 1999: Mannesmann chief executive Klaus Esser rebuffs Vodafone counterpart Sir Chris Gent's overture for 'friendly' merger.

24 Dec 1999: Vodafone unveils $132 billion hostile bid for Mannesmann.

1 Feb 2000: Support crumbling for Mannesmann go-it-alone strategy. Analysts and fund experts urge board to seek friendly agreement.

3 Feb 2000: 'Friendly' merger agreed - 50.5% owned by Vodafone, 49.5% by Mannesmann.

11 Feb 2000: News of near-£11 million bonus to Klaus Esser.

March 2001: German prosecutors probe suspected embezzlement by Esser. Prosecutors investigating whether about-turn was prompted by the payout to him and other Mannesmann executives.

17 Feb 2003: Breach of trust charges filed.

19 Sept 2003: Court says trial can go ahead against Deutsche Bank chief Josef Ackermann and others.