GERMANY: Authorities Investigating Deutsche Post CEO for Tax Evasion

Publisher Name: 
Der Spiegel

Klaus Zumwinkel, the
CEO of former German postal monopoly Deutsche Post, is under
investigation for tax evasion. SPIEGEL has learned that prosecutors
searched the home and office of the top manager on Thursday morning
and are preparing charges against him.



Deutsche Post CEO Klaus Zumwinkel has had his home raided over tax
evasion charges.


Prosecutors and tax investigators carried out simultaneous raids on
the headquarters of Deutsche Post in Bonn and CEO Klaus Zumwinkel's
private villa near Cologne early Thursday morning.  At midday
Zumwinkel left his home in a police vehicle, though he was released
later in the afternoon.




However, a spokesperson for the public prosecutors office in Bochum
told journalists that Zumwinkel and other unnamed persons were being
investigated.




"Zumwinkel is under suspicion of having evaded taxes amounting to
around 1 million euros," the spokesperson said. However, he said
the Deutsche Post CEO had made a statement and posted a hefty bail,
leading to the suspension of an arrest warrant that had been prepared
before Thursday's raid.  

Tax Evasion via
Liechtenstein?


Zumwinkel, who has been at the helm of Deutsche Post for 18 years, is
suspected of having committed tax evasion using a foundation in
Liechtenstein. SPIEGEL has learned that the self-proclaimed
multimillionaire is alleged to have made use of the foundation since
the mid-1980s and that investigators are looking into sums of more
than 10 million euros ($14.6 million). Extensive accounts of the
Liechtenstein financial institution show that Zumwinkel also
considered shifting his assets to Asia or the Cayman Islands, a
Caribbean tax haven.




On Thursday, Deutsche Post, which is Europe's biggest postal service,
confirmed that an investigation into Zumwinkel was underway. The
simultaneous raids at 7 a.m. had apparently been planned by public
prosecutors and tax investigators weeks in advance -- and only few
were aware of the planned operation.




The investigation has taken on a dimension previously unknown in
Germany. It was the first time in history that the CEO of a German
blue chip DAX company had been taken from his home by authorities in
front of live news cameras.  

Is Post Preparing
for Life, Post-Zumwinkel?


Still, a company spokesperson said the CEO was still "fully
capable" of running the business and that the Deutsche Post is
operating "business as usual." But the company refused to
comment on a report on the Web site of the Financial Times Deutschland
newspaper that the company is already preparing for life without its
longtime CEO. According to the paper, board member Frank Appel has
temporarily taken over leadership of the firm and is reporting
directly to the chairman of Deutsche Post's board, Jürgen Weber.
Appel, 46, has been the head of the company's logistics division since
2002 and he is Zumwinkel's designated successor.




The German government is the former postal monopoly's largest
shareholder, and on Thursday, politicians reacted to the development
with deep concern. Rainer Wend, the Social Democratic Party's (SPD)
business issues spokesman in parliament, said that while one should
presume Zumwinkel's innocence, "if the suspicion is proven true,
Zumwinkel cannot stay in office for a minute longer." He must be
proscuted to the "fullest extent" of the law, he said.
"It is incomprehensible that a multimillionaire like Zumwinkel
would have to go down this path just to save a few million in taxes,"
he added. "If that's the case, then we have lost even more faith
in our elite." The SPD is the junior partner in Germany's
coalition government with Angela Merkel's conservative Christian
Democrats.

Members of Merkel's
party, though, responded with reserve on Thursday. "We first want
to wait and see if the allegations become more solid," said
deputy floor leader Michael Meister. "We do, after all, follow
the rule of law here." He called on the public prosecutor to
pursue the investigation as "quickly as possible." The
party's business issues spokesman, Laurenz Meyer, refused to comment
on the investigation.


Zumwinkel is one of Germany's most influential businessmen. He sits on
the boards of Postbank and Deutsche Telekom and has been working on
plans to merge Postbank with another institution -- Deutsche Bank has
been cited as one possible candidate --  in order to create a
mega bank. This was intended to assure him of a brilliant end to his
career. It has long been clear that the 64-year-old would give up his
position at Deutsche Post at the end of 2008, when he reached
retirement age.

A member of
Zumwinkel's family became the focus of another tax evasion
investigation last summer, after an anonymous tip-off. That
investigation is also focusing on a Liechtenstein
foundation.
AMP Section Name:Corruption
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