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German telco chiefs face criminal prosecution

Leading figures in the German telecommunications industry are being probed by the Dusseldorf state prosecutor's office following a wave of criminal allegations.

By editorial@silicon.com

Published: 13 March 2001 13:09 GMT

Klaus Esser, former CEO of Mannesmann, is being investigated over claims he gave the green light to Vodafone's £113bn takeover last year after the board was offered a massive £32m redundancy payout.

Esser had vehemently opposed the takeover throughout and, in an ill-advised move, even took the telco's former financial advisor Goldman Sachs - which acted on its behalf in the £19.8bn purchase of Orange - to the High Court claiming a conflict of interest since the investment house was now representing Vodafone. The case was thrown out after three days.

Deutsche Telekom is also facing an investigation by the Bonn state prosecutor, at the company's shareholder's request, over allegations that its CEO Ron Sommer misled investors about the value of its real estate portfolio by falsifying its balance sheets.

The inquiry was launched after the company slashed its net earnings for 2000 because of a special charge related to the selling off some it property business.

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