Tognum Board Member Kneipp Relieved of Duties on Payment Probe

Tognum AG (TGM), the German engine maker majority owned by Daimler AG and Rolls-Royce Group Plc (RR/), said board member Peter Kneipp was relieved of his duties as part of an investigation into potential improper payments.

Chief Executive Officer Joachim Coers will take over Kneipp’s tasks effective immediately, after the supervisory board reached a mutual agreement with the executive, the Friedrichshafen, Germany-based company said today in a statement.

German prosecutors are investigating a Tognum executive for corruption over commissions that may have been wrongfully paid. Tognum said today that Kneipp and the company will cooperate with the investigation.

The Tognum management board member was chief of MTU’s Asian unit from 2004 to 2010 and knew about the alleged payments, according to a draft version of the report prepared for the company by Ernst & Young GmbH and obtained by Bloomberg News.

Tognum confirmed last week it has reviewed commissions that may have been improperly paid in connection with sales of defense-related products in South Korea from 2000 to 2011. Some funds were used to host members of the Korean military at Asian vacation resorts and night clubs in the Bangkok red-light district, according to the report.

The document, part of an internal review, focused on commissions paid to a South Korean businessman. At least 23 million euros ($32.6 million) of them may have been improper, according to the draft.

Daimler AG (DAI) and Rolls-Royce Group Plc jointly acquired Tognum, the world’s second-biggest manufacturer of high-speed diesel engines for the marine, energy and defense industries. Their bid was announced in March and the venture secured at least about 97 percent of Tognum shares, Daimler said Aug. 26. Tognum was previously a unit of Daimler before being sold to private equity firm EQT Partners in 2006.

To contact the reporter on this story: Karin Matussek in Berlin at

To contact the editor responsible for this story: Chad Thomas at

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