FRANKFURT (Reuters) - Bilfinger said on Tuesday it will pursue former executives of the German engineering group for at least 100 million euros ($123 million) in damages for alleged breaches of duty in compliance and mergers over almost a decade.
Once a prominent force in construction associated with the Munich Olympic stadium and Sydney Opera House, Bilfinger settled a Nigerian bribery case for $32 million in 2013 and had a U.S. Department of Justice compliance monitor embedded in the firm.
It issued six profit warnings and went through four chief executives in the space of two years as it lost oversight of a series of takeovers and bungled a strategy switch to services.
And in 2015 it disclosed that it may have paid bribes to public officials in Brazil for soccer World Cup contracts through its subsidiary Mauell.
“The former members of the executive board are accused of breaches of duty in the implementation of an orderly compliance management system,” Bilfinger said, adding that it would make claims against management board members from 2006 until 2015 who had joined before the start of the latter year.
It said that some former executives had also breached their duties in connections with past mergers, in the view of the supervisory board.
“According to the current provisional calculation, the amount of damages recoverable by Bilfinger as a result of these breaches is in the low three-digit million euro range,” it said.
Bilfinger said its current management board was now investigating whether members of the non-executive supervisory board may have also breached their duties.
Herbert Bodner, who was not immediately reachable for comment, was CEO of Bilfinger from 1999 until 2011 and the architect of the company’s transformation from construction to services, which at that time was a more profitable business.
Roland Koch, a former premier of the German state of Hesse, took over from Bodner but quit in 2014 after the first two profit warnings and now works as a lawyer.
Bodner stepped back in as interim CEO when Koch left for just under a year, until June 2015.
Koch said through a spokesman on Tuesday he was surprised at the decision to pursue “whole generations” of former managers and did not recognise any wrongdoing on his own account, adding that no concrete allegations had been made.
Bilfinger’s supervisory board said it had not yet decided which of the former executives to pursue for which amounts.
Juergen Schneider was finance chief of Bilfinger until 2009 and handed over to Joachim Mueller, who quit in 2015.
Mueller, who oversaw the 2012 acquisition of Mauell, did not immediately respond to a voicemail message.
Schneider, who went on to be dean of the Mannheim University’s business school, was not immediately reachable either through the school or HeidelbergCement, on whose supervisory board he sits.
A spokesman for Bilfinger, which has been run since July 2016 by ex-Linde manager Thomas Blades, said that more recent executives Per Utnegaard, Axel Salzmann and Michael Bernhardt were not being pursued for damages.
($1 = 0.8100 euros)
Additional reporting by Maria Sheahan; Editing by Arno Schuetze/Georgina Prodhan/Alexander Smith