Deutsche Bank chairman Josef Ackermann and five other co-defendants were found not guilty of the charges of breach of trust in the so-called Mannesmann trial, a Düsseldorf court ruled on Thursday.
The trial centered on Vodafone's takeover of Mannesmann
Ackermann, former Mannesmann chairman Klaus Esser, Mannesmann's former supervisory board chief Joachim Funk, the former head of the powerful IG Metall trade union, Klaus Zwickel, and two others, were found not guilty of any wrongdoing in the blockbuster corporate trial.
All were accused of approving millions of euros in severance packages for Mannesmann's top executives after British competitor Vodafone took over the company. The case has been seen as putting German corporate governance in the dock.
The presiding judge, Brigitte Koppenhföer, already said in a preliminary assessment half-way through the trial in March that while the actions of Ackermann and his five co-defendants may have breached German stock law -- which would be a civil matter -- they were not serious enough to warrant a criminal conviction.
"In this criminal process it is not up to the court to make management decisions or moral or ethical judgements," said Koppenhöfer on Thursday. "We are not judging German corporate culture although the evidence we saw was puzzling at times."
All were accused, to varying degrees, of wrongdoing, when they approved 111.5 million deutsche marks ($71 million) in bonuses to management board members during the multi-billion-euro takeover of Mannesmann by British mobile phone giant Vodafone in 2000. Esser alone pocketed more than €15 million.
Klaus Esser and Josef Ackermann
Prosecutors had argued that the size of the payouts clearly went against the interests of both Mannesmann and its shareholders and were therefore illegal under German share law. They called for a jail sentence of two years with probation for Deutsche Bank chairman Ackermann and wanted a two-and-a-half-year prison sentence without parole for former Mannesmann chairman Esser.
Judge Koppenhföer did rule that the payment to Esser broke corporate law because it came after the sale of the company to Vodafone.
"Additional remuneration for Esser equals double pay," she
said. "There was no benefit for Mannesmann to pay him for this integration period into Vodafone."
The defendants had argued that such large payments are common practice in other countries such as the United States and that sanctioning the executives would discourage any bold decision-making in German companies in future.
The blockbuster trial began on January 21, and the head of Germany's biggest bank was required to spend two days every week in court. Some 55 witnesses were heard during a total 37 days in court.
On the very first day, Ackermann, who has spent around €1.9 million on his defense, sparked widespread anger by making the "V" victory sign as he entered the court. But even after his acquittal, the trial will have hurt the image of Ackermann's bank, already scratched after a series of PR mishaps, such as Deutsche Bank's bungled handling of the flotation of Postbank and a lawsuit lodged by former client and one-time media magnate, Leo Kirch.
"I am extraordinarily grateful that the court sees the
situation the way we have always presented it," a relieved Ackermann told reporters on Thursday.
But prosecutors could still decide to appeal the verdict to a higher court, which could cause the saga to drag on for years.