Deutsche Bank CEO Josef Ackermann, currently facing “breach of trust” charges for approving controversial bonuses to Mannesmann directors, told a Düsseldorf court on Thursday that he had nothing to hide.
Deutsche Bank CEO Josef Ackermann, middle, looks confident as his trial gets underway.
Josef Ackermann, one of Germany’s top bankers, smiled at TV crews and reporters as he entered the regional criminal court in Düsseldorf on Thursday and appeared nonplussed under the prosecution's magnifying glass.
“I don’t know where there is supposed to be a legal problem,” he said during his 40 minutes of testimony.
The legal problem, according to the prosecution, is that Ackermann wasted shareholders’ money when he awarded multi-million euro bonuses to five former Mannesmann executives – also on trial -- following the sale in 2000 of the German mobile phone company to the British giant, Vodafone. All six defendants face fines or prison sentences of up to 10 years if found guilty.
No walk in the park
“According to business law I have acted correctly,” Ackermann said. The Deutsche Bank chief approved bonuses of around €57 million ($71 million) to the Mannesmann executives, who he said got the extraordinary reward for the job they did during the months-long takeover battle.
As defendant and former Mannesmann supervisory board head Joachim Funk put it, “a hostile takeover is hardly a walk in the park.”
Such large executive bonuses are uncommon in Germany, where executive pay is well below the salaries and bonuses paid to top managers in the United States or Britain. The trial is being closely followed by the German business community, as a guilty verdict could force directors to act more cautiously when awarding bonuses.
Ackermann and the five other defendants argue that the trial is an attempt to intimidate those who would encourage risk-taking in Germany’s traditionally conservative business climate, and could have the adverse effect of discouraging top talent from other countries from wanting to work here.
Ackermann received support from another of Germany’s business elite, Siemens Chief Executive Heinrich von Pierer. “It can’t be right that companies’ decision-making…is impaired because the offense of breach of trust hangs over them like a Sword of Damocles,” von Pierer said.
Deutsche Bank has stood behind Ackermann ever since charges were filed against him, though the Swiss-born banker will almost certainly have to resign should he be found guilty. Deutsche Bank shares were seemingly unaffected by the proceedings, performing in line with other major European banks.
Mannesmann’s former chief executive, Klaus Esser (photo), also gave testimony on Thursday. He is accused
Former Mannesmann chief executive officer Klaus Esser.
of abetting breach of trust by accepting around €30 million after the record €180 billion takeover. He said that the deal was a great victory for Mannesmann’s shareholders, but a defeat for its management board and executives. Esser’s testimony was interrupted when court was adjourned. The trial resumes next Wednesday.