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SOLAR

Prosecutor probes Solar Millennium manager’s pay deal

The state prosecutor is investigating the goings on in the boardroom of Germany’s flagship solar power company Solar Millennium, after a CEO who stayed just 74 days was paid €9 million, according to the Süddeutsche Zeitung.

Prosecutor probes Solar Millennium manager's pay deal
Photo: DPA

‘Star’ manager Utz Claassen, formerly in charge of energy firm EnBW, was engaged at the start of 2010 to lead the then mid-sized company into the major league, but left in the middle of March.

The arguments between him and the remaining Solar Millennium managers have since then become increasingly bitter, expensive and public.

Now after two internal investigative reports have been prepared on the dealings between the parties, the state prosecutor has become involved to look at suspected embezzlement and multiple violations of stock company law, the paper reported on Friday.

The newspaper said it had seen an internal investigative report which concluded that the supervisory board had been involved in criminal activity in connection with the millions of euros paid to Claassen for his work.

The high wage paid to Claassen alone, and what the report described as, “very generous repayment rules in the case of early departure” were borderline acceptable, the report said. But that border was clearly breached by a later additional agreement with Claassen.

This was a, “further high financial risk” for Solar Millennium when considering its modest turnover. The agreement was a, “serious stock company law breach,” the report said – and illegal as a potentially serious case of embezzlement, the paper said.

This report – held secret by the company – was commissioned last June, on the orders of Claassen’s successor as CEO, Thomas Mayer. It was a broadside against the supervisory board, which includes Hannes Kuhn, who founded Solar Millennium and still holds 15 percent of the company.

Shortly after the report was finished, Mayer also left the firm, the Süddeutsche Zeitung reported.

Now the state prosecutor of Nuremberg-Fürth is investigating three members of the supervisory board for embezzlement after a Solar Millennium shareholder made a complaint.

This could finally lead to questions about the last year’s dealings being answered, the Süddeutsche Zeitung said. These would include how a company with a 2009-2010 turnover of €73.2 million, with a pre-tax profit of €700,000 could agree a million-euro contract with Claassen, as well as whether his successor as CEO had to leave because he had uncovered evidence against the supervisory board.

The Süddeutsche Zeitung said that supervisory board papers show how Claassen had criticised the company’s business plan after just a month of being in charge.

A crisis meeting was held between him and the three-man supervisory board, with the board desperate to keep him on board. In order to do so, they agreed to a new deal with him – making it easier for him to leave with a ‘free departure option’, the paper said. A month later he was gone, taking his €9 million signing bonus with him and causing untold damage to the company’s image.

Not long after his March 2010 departure, his replacement Mayer commissioned the report which was so damning of the board’s actions. It was delivered in February 2011 but was never published, and the law firm which compiled it was not retained. Another law firm was commissioned to write another report, which the Süddeutsche Zeitung said was far more favourable to the supervisory board.

A spokesman for the company told the Süddeutsche Zeitung the second report was based on newer facts which were not available to the lawyers compiling the first report.

The first report had not, “considered the events which had then led to the contract,” supervisory board Michael Fischer told the paper. “The fact is much more that we were in a predicament in which we had to make a decision under time pressure. We had no choice other than to vote for the improvements in Mr Claassen’s contract in order to protect the firm from immediate damage.”

The continuing fight between Claassen and his former employer is set to enter the courts this autumn when its law suit against him for the return of the €9 million and his counter-suit for a €7.1 million settlement will be heard by a Nuremberg-Fürth judge.

Solar Millennium has often held up as a great example of the future of green industry in Germany. It is constructing the biggest solar generating station in the world, which will cover 2,800 hectares in the Californian desert and will deliver the same amount of electricity as a nuclear power station. A pilot project is already running in Spain while China and India have indicated interest in similar sites.

The Local/hc

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ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

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