In rare German boardroom fight, broker CEO exits with jab at founder

flatexDEGIRO SE

26/04/2024 14:05

* 
      Involves one of Germany's biggest online brokers,
FlatexDegiro
    

        * 
      CEO stepped down after criticism from founder and
shareholder
    

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      Disagreement included crypto strategy
    

  
    By Tom Sims
       FRANKFURT, April 26 (Reuters) - A rare public boardroom
dispute in Germany escalated on Friday, with the outgoing CEO of
a major online broker criticising a company founder who had
publicly campaigned against him.
    Frank Niehage, the CEO of broker FlatexDegiro  FTKn.DE ,
this week suddenly announced he would leave after 10 years at
the helm of the firm that operates in 16 countries with 2.7
million customers.
    The departure followed sharp criticism from the company's
founder and major shareholder, Bernd Foertsch, who told a
business magazine last month he would vote against Niehage and
the company's chair at an upcoming shareholder meeting due to
strategic mistakes, like "sleeping through a cryptocurrency
boom".
    It is rare in the staid corporate culture of Europe's
largest economy for such disagreements to occur in public rather
than behind closed doors.
    Niehage told a regularly scheduled earnings call with
analysts on Friday he had resigned to "avoid further damage" to
the company's reputation and to "resolve tension" with Foertsch.
    He accused Foertsch of trying to get a seat on the
supervisory board "through the back door, claiming to know
better what's good for the firm", and called on shareholders to
vote in favour of the chair at their meeting.
    "Please register yourself for the upcoming annual meeting
and exercise your voting power," Niehage said. "It is like in
democracies: if you don't vote, you support minorities."
    Niehage, Foertsch and the chair didn't immediately respond
to emails seeking comment. A FlatexDegiro spokesperson didn't
respond to repeated requests for comment.
    The broker, which was fined by its regulator in 2023 and
told to fix "serious shortcomings" in its internal controls, has
steadily increased its profits over the past year. On Thursday,
it posted a 340% increase in first quarter net profit from a
year earlier.
    
    Foertsch, in last month's interview with WirtschaftsWoche,
criticised FlatexDegiro for not offering cryptocurrencies like
Bitcoin directly through its platform.
    Niehage had in the past expressed scepticism about such
offerings, saying in October: "We are still in a crypto winter".
    Stephan Simmang, one of FlatexDegiro's two interim CEOs,
told journalists on Friday that Niehage "had an opinion on
crypto that many of us didn't agree with". 

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