Ex-general kujat holds his ground with heckler & cook in office
At a turbulent annual general meeting of the highly indebted weapons manufacturer heckler& koch has been able to keep supervisory board chairman harald kujat in office.
A motion by a luxembourg financial holding company to recall the 77-year-old from the control committee failed by a wide margin, receiving only 9.5 percent approval. This was no surprise, however, because the majority owner andreas heeschen had a close relationship with the retired military officer. Heeschen, in turn, was elected to the supervisory board – again against the resistance of the financial holding company CDE. The company holds only 5.1 percent of the share capital, but soon it could be more.
It was the first time that an H&K coarse shareholder had openly taken a confrontational stance at the annual general meeting and thus, to a certain extent, fired a warning shot against heeschen, with whose support kujat had only taken office in july. The CDE financial holding company complained that the ex-general had no business experience and was too old. The corporate governance of heckler& koch stipulates that a member of the supervisory board should not normally be older than 70. This is not a requirement.
During the eight-hour meeting, CDE representatives made their displeasure clear in long questionnaires – they questioned the reasonableness of decisions made in previous years. The main issue was a 100-million-euro loan taken out in 2006 with a very high interest rate of 9.25 percent. H&K used the money to make investments in other sectors, all of which failed.
According to statements by the chairman of the executive board, jens bodo koch, for example, a 16 million euro loan to a securities trader, which got into difficulties during the financial crisis, was "fully written off. A 2-million loan to a business aircraft company was also written off, and the investment in the later insolvent garden equipment company wolf garten was also a flop. H&K beteiligungsgesellschaft even invested in a diamond trader in the past decade – without any loss for the company from the black forest.
It was a kind of chronology of failure that CEO koch, who has been in office since 2018, read out in response to the CDE questions. The list of investment flops explained why the 900-employee company’s mountain of debt is still so exorbitantly high today. Loans of 237 million euros weigh on the company – this debt is thus about as high as the annual turnover.
Peace activists, who use individual shares as access to the arms manufacturer’s annual meeting and regularly lecture the board of management, also voiced criticism. You have been demanding for a long time that H&K change its business and manufacture other products that have nothing to do with weapons. The business conduct of majority shareholder heeschen over the past decade has also met with your disapproval. The investor, who had previously been, among other things, a managing director of the H&K investment company, had shown a "self-service mentality," complained one of the small shareholders at the lectern.
As expected, a motion by the so-called critical shareholders was clearly rejected. The initiator of this motion was the pacifist jurgen grasslin – he had demanded that the supervisory board no longer receive any money for its work in view of the company’s austerity course. Grasslin himself was not present at the shareholder meeting.
Also not present was majority owner heeschen. The 59-year-old german remained in england, where he has lived for a long time, for personal reasons. Only after the end of the meeting did he answer journalists’ questions in a conference call. "I absolutely reject the accusation of self-service," he emphasized. At that time, the company wanted to diversify and therefore invested in other sectors – the fact that this failed was due to the financial crisis. H&K had suffered a loss of 100 million euros as a result of the strategic investments. "This is indeed something that is a burden to the company."Nevertheless, the company had been able to invest continuously in its weapons production.
Heeschen holds just under two-thirds of the share capital in the arms manufacturer. However, as was revealed on thursday, he has pledged 10 million shares to CDE since 2015 as part of a loan agreement. Behind the company is the frenchman nicolas walewski, who once pulled together with heeschen – in the meantime the two have become enemies. Walewski had long since applied to have the share package transferred – according to heeschen, the shares were worth up to 100 million euros. If he got the shares, CDE – including other small share packages – had a majority stake in the german weapons manufacturer.
However, this still requires the approval of the federal government – berlin has a kind of veto right in the case of changes of ownership in the rustic sector. A corresponding signal could come in february or march. Heeschen’s influence at the weapons manufacturer was therefore soon to dwindle.
Harald kujat, chairman of the supervisory board, certainly got caught between the fronts in the power struggle. The 77-year-old sab sits silently on the podium at the meeting and just listens. Even after the end he did not want to make a fool of himself.
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