MTEL announced yesterday the resignation of Klaus Hartmann as CFO of MTEL to resume the post of CEO at another Deutsche Telekom company, PTC, the biggest mobile operator in Poland. Dr. Hartmann will remain in the BoD of MTEL. The Board is expected to appoint Thilo Kusch as the new CFO at its next meeting.
Our view: We believe that Deutsche Telekom is slowly effecting a managament overhaul at MTEL following the legal issues at one of its foreign subsidiaries (widely believed to be TCG), which has delayed the publication of its 2005 accounts, and subsequently dividend payments. Given that Dr. Hartmann is assuming a more senior position at another important DT company, we believe that DT is satisfied with his performance at MTEL. We also believe that DT is pursuing these management changes on the back of pressure from the US SEC and other shareholders. We would not be surprised at further announcements of management changes in the near future. Finally, the changes also appear to be part of damage control and we view the appointment of Thilo Kusch, a finance and IR specialist within the DT group positively. Although the shareprice could come under some pressure in the short term, we view the changes positively and shoud have a positive impact in the medium-term.