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Mannesmann 'fat cat' six are not criminals
But the €60m bonuses were a bit naughty, says judge...

By Ron Coates

Published: Thursday 01 April 2004

The chief judge in the Mannesmann trial has made a preliminary ruling that the six executives accused of awarding themselves €60m of bonuses broke no criminal law.

The ruling will come as a relief to former company chief Klaus Esser and the other four top Mannesmann executives. And it should mean that the other accused, Josef Ackermann, now head of Deutsche Bank and therefore Germany's top banker, can get back to his day job.

But the judge has also ruled that the bonuses and pension payments that the board awarded themselves were 'inappropriate' under German corporate law and might be considered criminal.

However, the accused could get a bye on this one as they had not acted with criminal intent and had followed the advice of their legal advisors. They could still face lawsuits from the current owner of the business - but, as this is Vodafone, it seems unlikely.

The two-day-a-week trial, scheduled to last until July, continues.

The case was Germany's first criminal trial over executive pay. The prosecution said that the six had breached their fiduciary duties to shareholders over the bonus and pension awards and suggested that they were a reward for surrendering control of Mannesmann to Vodafone in the biggest takeover ever seen.

Esser was heavily criticised for allowing one of the jewels of German industry to fall into foreign hands. When details of the pay awards emerged, the criticism turned to fury.