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Cartel Deals at Last Job Haunt Deutsche Telekom Executive

Thomas Kremer Telekomvorstand. Source DPA
Thomas Kremer, board member at Deutsche Telekom, is being questioned about his role in a rail cartel.
  • Why it matters

    Why it matters

    An investigation into compliance failures at his former employer is causing trouble for Thomas Kremer, the chief compliance officer at Deutsche Telekom.

  • Facts

    Facts

    • Several former Thyssen-Krupp managers are blamíng Thomas Kremer for failing to oversee compliance at the steelmaker.
    • The outcome of the case could jeopardize Mr. Kremer’s chances of securing the position of head of human resources at Deutsche Telekom.
    • Thyssen-Krupp was accused of being in a cartel that set the price of steel for railroad tracks.
  • Audio

    Audio

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Deutsche Telekom management board member Thomas Kremer, who has been in charge of data privacy, legal affairs and compliance at the telecommunications company for more than two years, won’t be able to shake off his past at one of the largest steel makers in Europe, Thyssen-Krupp.

In an antitrust investigation against the steelmaker, several defendants have announced their intention to expose what they view as glaring deficiencies in compliance in connection with the sale of steel for railroad tracks at a time when Mr. Kremer was chief compliance officer at Thyssen-Krupp.

Prosecutors are accusing 14 former managers at the steelmaker and other companies of fixing prices in the German railway steel market for years. According to internal records of the companies allegedly involved, the price fixing resulted in a cost of about €1 billion ($1.31 billion) to German taxpayers, who ultimately pay for most of the railway track laid in Germany.

 

001 Thyssen-Krupp
ThyssenKrupp by the numbers. Source: ThyssenKrupp

 

At least two of the defendants intend to prove that Thyssen-Krupp’s compliance department exercised poor control in the hope of weakening the prosecution’s charges against them.

This places Mr. Kremer at the center of the case, which will likely come before a regional court in Essen early next year. As the chief legal officer at Thyssen-Krupp between 2003 and June 2012, Mr. Kremer, a native of Bonn, was expected to ensure that the group’s business transactions complied with the law.

The rail cartel, which was only exposed in the spring of 2011, wasn’t the only criminal intrigue for which Thyssen-Krupp was used as a cover. Employees also formed cartels in other areas and paid bribes to kick-start contracts.

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