Mannesmann trial close to collapse after ruling

The trial of Germany's top banker and five other executives accused of taking vast payments during Vodafone's infamous takeover of Mannesmann was last night on the brink of collapse after the judge ruled that no criminal charges were warranted.

The judge, Brigitte Koppenhoeffer, said the bonuses received by Klaus Esser, Mannesmann's former boss, and other executives, may have violated securities law but were not a crime. Her ruling was preliminary and the trial would continue, she said.

But there now seems little doubt that all of the defendants - who include the chief executive of Deutsche Bank, Josef Ackermann - will be acquitted.

Mr Esser and his former colleagues had been accused of abusing the trust of their shareholders during Vodafone's gripping battle for control of the company four years ago. Following Vodafone's successful €180bn bid, the Mannesmann board approved a total of €57m in payouts to de parting Mannesmann staff. Mr Esser alone received €30m.

The payment provoked outrage in Germany where executive salaries are traditionally much lower than in Britain or the US, and prompted two disgruntled shareholders to complain to the court in Düsseldorf. The proceedings in the regional court appear to have had little to do with traditional crime and more to do with rival versions of capitalism - with the more ruthless reward-driven Anglo-US model pitted against the more managed and consensual German version.

The judge's ruling yesterday follows the court appearance last week of the former Vodafone chief executive Sir Christopher Gent, who said there was "nothing suspicious" in the bonuses given to Mr Esser and other Mannesmann executives after Vodafone's success.

"Klaus Esser's conduct throughout the three-and-a-half months prior to the bid was courteous and professional. He fought determinedly for the independence of his company. He never once mentioned his own position," Sir Christopher told the court.

After a meeting with lawyers involved in the case, the judge yesterday said the bonuses were contrary to civil securities law because they did not benefit the company. But she said she criminal charges were "not warranted".

The trial, which began in January, had been expected to go on until June when Ms Koppenhoeffer and four other judges were expected to rule on the defendants' guilt or innocence. The case, which is running two days a week, has been a major distraction for Mr Ackermann, the head of the Germany's largest bank and a Mannesmann board member at the time of the deal.

He faces up to 10 years in prison if convicted - which now looks unlikely.

Others on trial are former Mannesmann personnel chief Dietmar Droste, the company's board chairman, Joachim Funk, and two board members - Juergen Ladberg, an employee representative and Klaus Zwickel, the retired head of the IG Metall union.