German prosecutors have expanded their investigation of Vodafone's hostile takeover of German telecoms company Mannesmann to include Vodafone chief Mr Chris Gent and the designated chairman of Deutsche Bank, Mr Josef Ackermann.
The investigation centres on bonuses of more than 60 million deutschmarks (€30.68 million) paid to Mannesmann's 18-member board by Vodafone in the form of supplementary pension payments after the company completed its takeover in February 2000.
Mannesmann chief executive Mr Klaus Esser was the largest single beneficiary, receiving a golden handshake of a DM32 million bonus and additional severance pay of DM28 million.
Mr Esser and members of the board could be prosecuted for breach of trust and embezzlement if investigators prove the bonuses constituted a bribe used to "buy" approval of the takeover.
Mr Esser confirmed the size of the payments made by Vodafone, but denied it constituted a bribe or influenced the board's decision to give in to Vodafone's bid.
"The size of the payment and the circle of recipients is correct," said Mr Esser.
"I spoke out against this decision, however, it was ultimately the committee's decision," he told the Frankfurter Allgemeine Zeitung.
The expanded investigation will also target Mr Klaus Zwickel, a member of the former Mannesmann supervisory board chairman and the leader of Germany's powerful IG Metall metalworkers' union.
The news took the the shine off Mannesmann's announcement yesterday of half-year profits of €8.9 billion (£7 billion). The expanded investigation is also likely to cast a shadow over what is likely to be Mannesmann AG's last annual conference tomorrow. The three-month struggle for control of Mannesmann was without precedent in German business history and the effects are still being felt.
Vodafone finally gained control of the 110-year-old company in February 2000 for the still record-price of €180 billion. The deal was front-page news, as were the record payments made to board members when details emerged days later.
The hostile takeover was a lesson to the German government, prompting Chancellor Gerhard Schr÷der to put together a commission to hammer out new national takeover legislation. The Mannesmann takeover contributed to the veto of common EU takeover rules last month after 12 years of negotiation.
