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Last Updated: Wednesday, 21 January, 2004, 07:46 GMT
Germany awaits Mannesmann trial
Mannesmann HQ
The Mannesmann takeover was bitterly contested
Former bosses at German phone firm Mannesmann are due in a Duesseldorf court on Wednesday in the country's biggest ever corporate ethics trial.

They are accused of approving excessive bonuses for Mannesmann board members when the firm was taken over by the UK's Vodafone four years ago.

The list of defendants reads like a roll call of Germany's business elite.

It includes Deutsche Bank chairman Josef Ackermann, and Klaus Zwickel, ex-boss of the IG Metall union.

They will be appearing in the dock alongside former Mannesmann chief Klaus Esser, and three other senior Mannesmann executives.

57 million euro question

The trial will determine whether the six defendants broke the law by approving bonuses totalling 57m euros in the wake of the takeover.

Deutsche Bank chairman Josef Ackermann
Josef Ackermann will stay on as Deutsche Bank chairman
If found guilty, they could face up to 10 years in prison.

Prosecutors allege that the bumper payouts breached laws obliging company directors to protect shareholders' interests.

The defendants have all denied any wrongdoing, and have previously argued that the bonuses were not unreasonable given the size of the Vodafone deal.

The takeover, valued at $180bn, at the time ranked as the biggest acquisition in corporate history.

Supporters of the defendants have also claimed that the trial may deter foreign investment in Germany.

Bitter memories

But the prosecution case has struck a chord with some Germans who saw the Mannesmann takeover as an assault upon the country's social market economy.

The bonus payments - unprecedentedly large by German standards - proved hugely controversial, all the more so when it emerged that many Mannesmann employees were to lose their jobs once the takeover was complete.

Deutsche Bank has said Mr Ackermann will still be able to fulfil his duties, despite having to attend hearings every Wednesday and Thursday in the Duesseldorf regional court for the next six months.

The bank has also said it expects Mr Ackermann to be acquitted.

Former Vodafone chief executive Chris Gent, the architect of the Mannesmann takeover, is expected to be called as a witness.


WATCH AND LISTEN
The BBC's Hywel Jones
"The defendants deny the allegations"



SEE ALSO:
Trial puts business culture in dock
21 Jan 04  |  Business
German bank chief to face trial
19 Sep 03  |  Business
Six charged over Mannesmann bonus
19 Feb 03  |  Business
Vodafone hits back at bonus claims
21 Aug 01  |  Business


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