RAG board backs CEO Bonse-Geuking in Evonik dispute

31 August 2010 16:06  [Source: ICIS news]

TORONTO (ICIS)--The supervisory board of Germany’s RAG-Stiftung has backed chief executive Wilhelm Bonse-Geuking against repeated media allegations of improprieties in the 2008 sale of a 25.01% stake in specialty chemical major Evonik to private equity firm CVC, RAG said on Tuesday.

Contrary to the allegations, Bonse-Geuking and his management team had fully informed the board – called “Kuratorium” - of the €2.4bn ($3.0bn) deal, RAG said.

Furthermore, CVC had not been granted any “unusual or excessive rights”, as alleged in the reports, RAG said.

Following the reports – spearheaded by Handelsblatt, a business daily – the board had hired an independent expert to look into the allegations, it said.

The expert’s findings, as well as additional reviews of contracts and minutes, showed that the media allegations were without basis, RAG said.

RAG-Stiftung is a coal foundation that is charged under a German law – “Steinkohlefinanzierungsgesetz” - with overseeing the phase-out of the country's subsidised hard coal production by 2018.

Proceeds from an eventual sale or initial public offering of Evonik are meant to help pay for environmental costs and liabilities associated with the phase-out. If the proceeds do not cover the costs, German taxpayers will likely have to make up the difference.

German commentators noted that the allegations came shortly after a Social Democrat-Green Party coalition took over the government in North Rhine-Westphalia state from a Christian Democrat-Liberal coalition last month.

Bonse-Geuking, a former BP executive, had been appointed under state premier Jurgen Ruttgers, a Christian Democrat, while the Social Democrats had favoured Werner Muller, a former Evonik head and federal minister, they said.

Westdeutsche Allgemeine Zeitung, a regional daily, said in an editorial that within the structure of RAG-Stiftung, Evonik was practically the property of German taxpayers.

As such, it was inevitable that the specialty chemical major would become the focus of political conflict, the paper said and went on to predict further disputes going forward.

($1 = €0.79)

For more on Evonik and other producers visit ICIS company intelligence
To discuss issues facing the chemical industry go to ICIS connect


By: Stefan Baumgarten
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