Rare German boardroom fight escalates as company founder seeks board shake-up

flatexDEGIRO SE

06/05/2024 16:43

By Tom Sims
       FRANKFURT, May 6 (Reuters) - An unusually public
boardroom dispute in Germany took a new turn on Monday, with the
founder and major shareholder of a leading online broker telling
Reuters why he wants to oust the company's chair and advocating
for his candidate to replace him. 
    Bernd Foertsch, the publisher who controls nearly 20% of the
German broker FlatexDegiro  FTKn.DE , informed Flatex on Friday
that he would seek to oust the company's current chair, Martin
Korbmacher, at a shareholder meeting in June. 
    "I would like to see a fresh start for FlatexDegiro - and he
is not the right man for the job," Foertsch said on Monday in
response to emailed questions from Reuters.
    Flatex, which operates in 16 countries with 2.8 million
customers, declined to comment. Korbmacher, who has previously
declined to comment, didn't immediately respond to a request for
comment.
    It is the latest twist in an ongoing dispute after Foertsch
successfully campaigned against the CEO, Frank Niehage, who
resigned last month.  On Friday, Foertsch also proposed two new
board members, himself and a former UBS executive, Axel Hoerger.
    Now, Foertsch is making clear in the emailed responses why
he is backing Hoerger as the new board chairman.
    "Axel Hoerger seems to me to be the right person to bring
calm back to the company and to lead the supervisory board
during what I consider to be the necessary restart," Foertsch
said.
    The back-and-forth has been remarkable in Germany, where a
staid corporate culture makes it rare for such disagreements to
occur in public rather than behind closed doors.
    "The public debate was preceded by long discussions, but I
found that these discussions did not result in any reactions,
let alone changes," Foertsch said.
     The kerfuffle began in March when Foertsch told a business
magazine he would vote against Niehage and Korbmacher at the
June shareholder meeting due to strategic mistakes, such as
"sleeping through a cryptocurrency boom".
    Niehage said he had resigned to avoid further damage to the
company's reputation and to resolve tension with Foertsch.
    In a departing swipe, Niehage 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 Korbmacher at their meeting.
    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. 
    Last month, it posted a 340% increase in first quarter net
profit from a year earlier, causing its shares to rally.

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 (Reporting by Tom Sims; editing by Jonathan Oatis)
 ((Tom.Sims@thomsonreuters.com; +49 30 220 133 645;))