Ackermann acquitted in Mannesmann trial
Deutsche Bank chief executive Josef Ackermann was this week cleared of charges relating to bonus and pension payments he approved while acting as a director of mobile telephone company Mannesman. That will come as a relief to Deutsche, which has had to deal with its CEO spending two days a week at a specially-established satellite office while the trial proceeded. Ackermann, along with five co-defendants (all cleared), contested that the contentious payments were compensation for successfully steering the company to a merger with Vodafone; prosecutors, who had sought prison sentences and have entered an appeal against the verdict, say they "breached trust" by approving a payment that amounted to little more than a lavish bribe. The judgment was widely considered to be a litmus test for Germany's tolerance of "Anglo-Saxon" style free-marketeering. That was explicitly recognized by the presiding judge, who said her court didn't "take any moral or ethical decisions. We don't judge Germany's corporate culture."
The Swiss head of Deutsche Bank and five co-defendants have been acquitted of criminal charges over payments to executives during a telecom takeover battle. Josef Ackermann had stood accused of acting illegally in approving payments made during Vodafone’s 2000 buyout of Mannesmann. The six-month trial ended after the presiding judge, Brigitte Koppenhoefer, cleared all six of criminal charges of breach of trust or abetting a breach of trust. The acquittal in the German city of Düsseldorf had been widely expected after the judge said in a mid-trial review at the end of March 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 sought a two-year suspended sentence for Ackermann, while two former Mannesmann executives faced prison terms of at least two and a half years. Speaking after the verdict was announced, Ackermann said he was "very thankful... that all the accusations of corruption and of being corruptible [were] absolutely off the table". "Acquitted is acquitted and now we can again concentrate on the bank," he added.
Ackermann and the five other defendants, including former Mannesmann boss Klaus Esser, successfully denied charges of breach of trust in approving €57 million in bonuses and retirement packages to executives when Mannesmann was taken over by Vodafone four years ago. Although he received no money himself, Ackermann - a former top manager at Credit Suisse - was on the Mannesmann board at the time and signed off on the payments. Prosecutors based the charges on allegations that the executives failed in their duty to properly “manage” or “safeguard” Mannesmann assets. The defence lawyers had called for acquittals, saying that the prosecutors failed to prove actual economic damage to the companies and that the payouts were appropriate compensation for increasing Mannesmann’s value. Had the trial gone against him, Ackermann would have faced a fine or prison sentence and would almost certainly have had to step down from the board of Germany’s largest bank.
Many observers saw the trial as a test of a company’s right to offer financial rewards to senior executives. There were also fears that some international corporations would shy away from doing business in Germany if the case had gone against the defendants. But in her ruling on Thursday, Koppenhoefer said it was not up to the court to pass moral judgement. “We are not sitting in judgement on German corporate culture, though the evidence that was heard provoked astonishment,” she said in court. The acquittal removes a major distraction for Ackermann, who has been forced to attend court proceedings twice a week since the trial got underway on January 21.