Commerzbank Leadership Crisis Deepens With Cerberus Opposition

Commerzbank AG was planning to move past a long leadership crisis as early as Monday. Instead, the conflict over who should take the bank forward has only deepened.

Cerberus Capital Management LP has told the lender it opposes the appointment of Hans-Joerg Vetter as the bank’s new supervisory board chairman, adding to resistance from labor representatives. That comes after earlier pressure from the U.S. private-equity firm helped remove the lender’s outgoing chairman and chief executive officer.

“We have serious doubts” about Vetter, the bank’s second-biggest shareholder said in a letter to the board seen by Bloomberg News. The incumbent chairman, Stefan Schmittmann, will step down at a meeting of the supervisory board later Monday. He and CEO Martin Zielke jointly announced their resignation last month, leaving a hole in the upper leadership ranks of Germany’s second-largest publicly traded bank.

The decision by Schmittmann and Zielke came after a poor share price performance and harsh criticism from its two top shareholders, Cerberus and the German government. Vetter last week emerged as the leading candidate to replace Schmittmann, Bloomberg has reported, and his appointment would be a crucial first step in overcoming the leadership crisis created by the twin resignations.

The letter from Cerberus on Monday adds to a crescendo of opposition against Vetter, who was picked by a committee led by Jutta Doenges, one of the two German government representatives on Commerzbank’s supervisory board. Some labor representatives on the board would vote against Vetter should he be up for election at Monday’s meeting, Bloomberg reported on Friday.

A Commerzbank spokeswoman declined to comment.

Cerberus said in the letter it wants a candidate who works with all stakeholders toward a common goal and it has identified two other candidates, withouth giving their names. The investor hasn’t spoken with Vetter before or after he got picked, Bloomberg has reported.

Cerberus Activist Pivot Ejected Commerzbank Leaders Within Weeks

The message from Cerberus on Monday continues its unusual campaign against Commerzbank’s leadership. The investor earlier this year wrote a scathing letter to Schmittmann, lambasting him and his team for what it called an “abject failure” to turn the bank around. Cerberus bought its 5% stake in Commerzbank three years ago and the investment has since lost more than 60% of its value.

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