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Deutsche Post boss resigns amid massive tax probe

Latest update : 2008-02-15

Klaus Zumwinkel, the head of Deutsche Post, resigned on Friday after becoming embroiled in a large-scale German investigation into tax evasion.

Germany was set on Friday for a monumental tax scandal after a finance ministry spokesman said some of the country's richest people were suspected of hiding assets in Liechtenstein.
   
Justice officials were probing "a very large number of cases" of tax fraud, possibly including one allegedly involving Deutsche Post head Klaus Zumwinkel, a finance ministry spokesman said.
   
The spokesman declined to comment on precisely who was under investigation, saying only it was a question of "key personalities" and that they were "people whose revenues are at the high end of the scale."
   
The unfolding story has made headlines for two days. Liechtenstein is a small principality between Switzerland and Austria, widely regarded as a tax haven.
   
The German population, which places a high value on social and financial probity, was shocked last year by scandals at two industrial titans, the engineering giant Siemens and the biggest European car maker, Volkswagen.
   
Zumwinkel handed in his resignation on Friday after 18 years as head of Deutsche Post, which with its express delivery company DHL claims to be the world's leading logistics group.
   
The finance ministry spokesman welcomed Zumwinkel's decision, adding that he "assumed the resignation would be accepted" by the group's shareholders.
   
The state owns 30 percent of Deutsche Post, while 70 percent is listed on the stock market.
   
A Deutsche Post statement said its executive committee would "propose to the supervisory board to accept the decision in the near future."
   
On Thursday, a German prosecutor had said that Zumwinkel was suspected of tax fraud that amounted to one million euros (1.46 million dollars).
   
Ulrich Wilhelm, spokesman for German Chancellor Angela Merkel, acknowledged the affair would "have a cost in terms of confidence and credibility" in top Germany bosses.
   
He hastened to add however that "the vast majority of business leaders worked seriously."
   
Meanwhile, press reports said officials were tracking possible tax evasion by hundreds of personalities suspected of placing funds in a bank in Liechtenstein.
   
The announcement of the probe involving Zumwinkel could be the tip of the iceberg, according to sources quoted by the business daily Handelsblatt and television channel ZDF.
   
LGT Group, a bank in Liechtenstein, had become a center of focus, ZDF reported.
   
A spokesman for the bank said in a statement sent to AFP that "we have taken note of the extensive media coverage. The LGT-Treuhand bank, which has its headquarters in Vaduz, is in the process of verification.
   
"LGT-Treuhand is an independent subsidiary of the LGT group, which is specialised in creating foundations," the statement said.
   
The bank's Internet site describes it as a wealth and asset managment group.
   
German business daily Handelsblatt quoted an unidentified investigator as alleging that foundations were created to assist fiscal evasion.
   
"We have taken the bank apart," the investigator was quoted as saying.

Date created : 2008-02-15

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