FRANKFURT, April 1 (Reuters) - Troubled German engineering services group Bilfinger will not ask its shareholders for a routine approval of five executives’ performance at its annual meeting next month because of ongoing compliance investigations, it said on Friday.
Approving top executives’ work is a routine item at German companies’ annual shareholders’ meetings, but Bilfinger said the omission was not an implication of misconduct by board members.
Four of the five executives have left the company, including ex-Chief Executive Herbert Bodner, who was replaced last June after the company issued a rapid succession of profit warnings.
In its invitation to its AGM on May 11, the company said it would wait until it had all the relevant information to let its shareholders make an informed decision on the executives’ performance.
Loss-making Bilfinger, which is contemplating a breakup, has a compliance monitor appointed by the U.S. Department of Justice working inside the company as part of a settlement agreement for an old bribery case in Nigeria.
It is currently under internal and external investigation on suspicion that employees of a subsidiary paid bribes to public officials in Brazil in connection with orders related to the 2014 World Cup.
The other people whose approval will not be put to a vote at the AGM are ex-Chief Financial Officer Joachim Mueller, ex-head of the Power unit Joachim Enenkel, ex-head of the Industrial unit Pieter Koolen and current Building and Facility unit head Jochen Keysberg.
Bilfinger, under a new chairman picked by activist major shareholder Cevian, conducted a shakeout of top management last year, which only Keysberg survived.
Bilfinger said Keysberg was included in the list because he was already on the management board during the time covered by the investigations.
The other three current management board members - CEO Per Utnegaard, CFO Axel Salzmann and human resources chief Michael Bernhardt - were only appointed last year.
“The mere decision to propose delaying the approval of the affected managers is judgement-free and cannot be interpreted as an allegation of misconduct of the individual management board members,” a Bilfinger spokesman said.
Bilfinger expects to spend about 50 million euros this year on revamping its compliance system and settling old cases. Last year, it hired ex-U.S. Federal Bureau of Investigation director Louis Freeh to help it fight corruption.
Utnegaard said at a news conference last month that the company aimed to establish a new compliance culture. ($1 = 0.8809 euros) (Reporting by Alexander Huebner and Ilona Wissenbach; Writing by Georgina Prodhan; Editing by Susan Fenton)