Breaking News

Tweet TWEET

ThyssenKrupp Chairman Quits as Company Breaks With Past

Gerhard Cromme, who shaped the fate of German steelmaker ThyssenKrupp AG (TKA) in a career spanning almost three decades, unexpectedly resigned as chairman of the supervisory board as the company seeks to break with a past tainted by corruption and price-fixing scandals.

Cromme, 70, is stepping down from the post he held for 12 years on March 31, Essen-based ThyssenKrupp said in a statement today. He will also quit as vice chairman of the board of trustees and as a member of the Alfried Krupp von Bohlen und Halbach Foundation, the company’s largest shareholder.

His departure ends a reign that began more than 27 years ago, when Cromme was handpicked by industrialist Berthold Beitz, 99, to take the helm at a predecessor of ThyssenKrupp’s steel unit. Cromme, also chairman of Siemens AG (SIE)’s supervisory board, resisted calls to resign at the steelmaker’s annual general meeting in January in the biggest shareholder rebellion in the 14-year history of the merged company.

“It’s a good day for the shareholders,” Trudbert Merkel, who is responsible for Deka Investment GmbH’s 0.78 percent stake in ThyssenKrupp, said by phone. “It’s a logical conclusion. He’s taking responsibility for the investment disaster with Steel Americas. For all Beitz’s blind loyalty, he can’t ignore the mistakes of the supervisory board.”

Shares Gain

ThyssenKrupp gained the most in almost six months after the announcement, advancing 6.4 percent to 18.285 euros by the close in Frankfurt. The stock has lost 49 percent since March 31, 2008, compared with a 22 percent gain in the DAX Index of the 30 largest German companies, according to data compiled by Bloomberg.

Chief Executive Officer Heinrich Hiesinger is attempting to repair the damage from the missteps that cost the company 3.6 billion euros ($4.7 billion) in writedowns in the year ended Sept. 30 and prompted ThyssenKrupp to cancel its dividend for the first time since the company was formed through the 1999 merger of Thyssen AG and Fried. Krupp AG.

Hiesinger became CEO two years ago amid price-fixing and bribery scandals and after a botched expansion in the Americas that produced a 4.7 billion-euro loss in the last fiscal year.

The supervisory board waived half of last year’s pay in response to the shareholder unrest, Cromme said at the annual shareholder meeting on Jan. 18.

‘Support Renewal’

“I want to support a renewal regarding the supervisory board,” Cromme said in today’s statement.

Germany’s Federal Cartel Office raided ThyssenKrupp’s offices in the city of Duisburg last month in the latest in a wave of investigations into the company’s business practices.

The antitrust watchdog raided four offices as well as private apartments in a probe into supplies to the automotive industry. ThyssenKrupp last year ousted three board members as Hiesinger instigated cultural and leadership change.

While last month’s raids are based on the suspicion of antitrust law violations, they serve to gather information and don’t mean the affected companies or people involved have engaged in wrongdoing, the regulator said at the time.

To contact the reporter on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.