FRANKFURT Three key executives at ThyssenKrupp (TKAG.DE), Germany's biggest steelmaker, are leaving in a major board shake-up largely due to losses at Steel Americas, a flagship project the company is now trying to get rid of.
A company statement late on Wednesday said Olaf Berlien, Edwin Eichler and Juergen Claassen "have agreed to lay down their functions" from end of this year.
ThyssenKrupp said the personnel committee of the supervisory board and Chief Executive Heinrich Hiesinger made the proposal for the supervisory board "to release" the three from their responsibilities.
"With this recommendation to the supervisory board, the personnel committee recognizes the comprehensive responsibility of the executive board for the management as well as for the leadership culture of the group," it said.
The departure of the three executives leaves Hiesinger with two board members - finance director Guido Kerkhoff and personnel head Ralph Labonte - both of whom came in after he took the reins a year ago.
ThyssenKrupp is now trying sell its U.S. and Brazilian carbon steel mills, which make up the money-losing Steel Americas, a division reportedly heading for a loss of more than 1 billion euros ($1.3 billion) this year.
Last year, ThyssenKrupp failed to meet its operating target, burdened by a 2.9 billion-euro impairment due to cost overruns in North American at its carbon steel mill and a stainless plant, and a 1.07 billion-euro operating loss at Steel Americas.
ThyssenKrupp said on Wednesday an external audit had found that the former management board based its Steel Americas decisions on assumptions that were either too optimistic or later proved to be incorrect.
Berlien and Eichler in 2002 were appointed to the board headed by Ekkehard Schulz, who oversaw the construction of some $12 billion worth in total of two carbon steel plants and a stainless steel plant as part of expansion in North America.
Claassen, who joined the board in January last year, had already asked the supervisory board on December 1 to be released from his duties until further notice.
In addition to Steel Americas, the company said it was now confronted with disclosure of a series of corruption and cartel cases, raising "the question of the current leadership culture within the Group."
ThyssenKrupp had previously said prosecutors were investigating former employees over alleged fraud linked to suspicious payments in Eastern Europe.
The German cartel office this year fined four rail track suppliers, including a unit of the steelmaker, for price fixing.
None of the three executives has been linked to the corruption and cartel cases.
The supervisory board is scheduled to meet on December 10, a day before the company releases its full-year results to September 2012.
(Reporting By Marilyn Gerlach; Editing by Mike Nesbi, Dan Grebler and Steve Orlofsky)