Zurich to look at ‘undue pressure’ on CFO
GENEVA (AP) — After the apparent suicide of its chief financial officer and the sudden resignation of its chairman in response, Zurich Insurance Group has launched an investigation into their working relationship.
Zurich’s acting chairman, Tom de Swaan, said Friday that the company’s board would look into the possibility of “undue pressure” placed upon Pierre Wauthier, who was found dead Monday and left a note describing his dealings with former chairman Josef Ackermann.
“We were informed that such a letter exists, and we are aware of its content. And it’s correct that it relates to the relationship between Pierre Wauthier and Joe Ackermann,” de Swaan said in a conference call with investors and analysts.
“These tragic events have cast a shadow over Zurich,” de Swaan said.
Ackermann said he resigned abruptly on Thursday to avoid any damage to Zurich’s reputation, citing “unfounded” allegations by Wauthier’s family that he bore some responsibility for the former CFO’s death.
According to a Zurich official, who has been briefed on the note by the company but spoke to The Associated Press only on condition of anonymity because of the sensitivity of the matter, Wauthier wrote that he disagreed with Ackermann over how the company did its financial reporting and was being pressured by Ackermann on how the numbers should be presented. Ackermann thought that Wauthier was playing down some negative aspects of the company’s financial performance, the official said.
Swiss newspaper Tages-Anzeiger of Zurich also reported there was disagreement between Ackermann and Wauthier over how the company’s financial results should be presented in its reporting to investors.
While he would not detail the note’s contents to the conference call, de Swaan clearly indicated that the probe into undue pressure was a direct result of what Wauthier wrote before his death.
“The board sees it as its prime responsibility to look into the question as to whether there was undue pressure placed on our CFO,” said de Swaan, who had been vice chairman of the board until this week. “Let me be absolutely clear: We, meaning the board and the management of Zurich, take corporate culture and behavior very seriously.”
Ackermann had left Deutsche Bank only last year to become chairman of Zurich. The company reported that it was struggling to meet its targets and posted an 18 percent drop in quarterly profits just two weeks before the chief financial officer’s death.
Zurich’s CEO Martin Senn said the company remains profitable and the half-year figures it released this month were accurate.
“With respect to what happened in the last few days, I want to make it crystal clear that there is no link between this news and Zurich’s business and financial performance,” Senn said during the conference call, when he was asked whether Zurich’s financial reporting was too “rosy.”
“Everything we have said at the half-year stands,” Senn said.
“The results, as we have reported them at the half-year and in any other reporting period, they are what they are. They are not, in any way, different than what proper, effective, prudent accounting requirements are. These results are independently reviewed by our auditors. Any comments made now in terms of bringing this incident back into the results — I consider this totally unfounded.”
Ackermann is one of Europe’s highest-profile businessmen. He had spent more than a decade at Deutsche Bank, where he made significant profits and led the bank through the global financial crisis.
However, his tenure also included legal troubles, some of which still plague his successors.
Ackermann was put on trial on charges of breach of trust in connection with large bonus payments made to executives at telecommunication firm Mannesmann, where he served on the board. Mannesman’s CEO, board chair and other officials got 57 million euros ($76 million) in bonuses after they accepted a hostile takeover by Britain’s Vodafone in 2000.
He was acquitted in 2004 and but retried after prosecutors appealed. The second trial was halted in 2006 after he agreed to make 3.2 million euros in public and charitable payments