The head of Deutsche Bank must go back to court to be retried over windfall bonuses he waved through at telecoms firm Mannesmann, the German federal court ruled on Wednesday, threatening his future as chief executive.
Josef Ackermann and five others had been cleared by a regional court last year of wrongdoing in paying departing executives of Germany's Mannesmann almost 60 million euros ($70 million) in bonuses and benefits five years ago.
But on Wednesday, Germany's federal court overturned the ruling and said Ackermann had failed in his duty to protect Mannesmann's interests.
"Such a bonus is nothing other than a waste of money and that runs against their fiduciary duty," said Klaus Tolksdorf, the lead judge overseeing the hearing, before a crowded court. "There was no incentive to management as a result of the payments."
Tolksdorf had harsh words for a comment by Ackermann during the first trial, when he complained that individuals creating value in Germany had been forced to reckon with a criminal prosecution.
"Punishable behaviour will not go unpunished just because some parties set themselves above the law," Tolksdorf said.
Ackermann's lawyers, looking grim, said the ruling sent the case "back to square one". They had called him immediately after the judgement to inform him of the ruling.
The court's decision heightened speculation that Ackermann would leave his post, although financial watchdog BaFin said it would not push for his resignation unless there was a guilty verdict.
Deutsche Bank's non-executive chairman, Rolf Breuer, had already told the Financial Times that he was considering a possible successor to Ackermann.
The payments to Mannesmann Chief Executive Klaus Esser and others were signed off by Ackermann and other board members after Mannesmann gave up its fight against Vodafone Group Plc's 178 billion euro hostile take-over in 2000.
Ackermann knows that a retrial could tarnish the reputation of the bank he has led for just three years and may quit if a retrial drags on, a senior Deutsche Bank official had said before the judgement.
The court ruling caps a year of mishaps for the bank, which came under fire for cutting jobs while unveiling record profits. It recently barred investors in a troubled property fund from selling their stakes.
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