‘Star’ manager Utz Claassen, formerly in charge of energy firm EnBW, was engaged at the start of 2010 to lead the then mid-sized company into the major league, but left in the middle of March.

The arguments between him and the remaining Solar Millennium managers have since then become increasingly bitter, expensive and public.

Now after two internal investigative reports have been prepared on the dealings between the parties, the state prosecutor has become involved to look at suspected embezzlement and multiple violations of stock company law, the paper reported on Friday.

The newspaper said it had seen an internal investigative report which concluded that the supervisory board had been involved in criminal activity in connection with the millions of euros paid to Claassen for his work.

The high wage paid to Claassen alone, and what the report described as, “very generous repayment rules in the case of early departure” were borderline acceptable, the report said. But that border was clearly breached by a later additional agreement with Claassen.

This was a, “further high financial risk” for Solar Millennium when considering its modest turnover. The agreement was a, “serious stock company law breach,” the report said – and illegal as a potentially serious case of embezzlement, the paper said.

This report – held secret by the company – was commissioned last June, on the orders of Claassen’s successor as CEO, Thomas Mayer. It was a broadside against the supervisory board, which includes Hannes Kuhn, who founded Solar Millennium and still holds 15 percent of the company.

Shortly after the report was finished, Mayer also left the firm, the Süddeutsche Zeitung reported.

Now the state prosecutor of Nuremberg-Fürth is investigating three members of the supervisory board for embezzlement after a Solar Millennium shareholder made a complaint.

This could finally lead to questions about the last year’s dealings being answered, the Süddeutsche Zeitung said. These would include how a company with a 2009-2010 turnover of €73.2 million, with a pre-tax profit of €700,000 could agree a million-euro contract with Claassen, as well as whether his successor as CEO had to leave because he had uncovered evidence against the supervisory board.

The Süddeutsche Zeitung said that supervisory board papers show how Claassen had criticised the company’s business plan after just a month of being in charge.

A crisis meeting was held between him and the three-man supervisory board, with the board desperate to keep him on board. In order to do so, they agreed to a new deal with him – making it easier for him to leave with a ‘free departure option’, the paper said. A month later he was gone, taking his €9 million signing bonus with him and causing untold damage to the company’s image.

Not long after his March 2010 departure, his replacement Mayer commissioned the report which was so damning of the board’s actions. It was delivered in February 2011 but was never published, and the law firm which compiled it was not retained. Another law firm was commissioned to write another report, which the Süddeutsche Zeitung said was far more favourable to the supervisory board.

A spokesman for the company told the Süddeutsche Zeitung the second report was based on newer facts which were not available to the lawyers compiling the first report.

The first report had not, “considered the events which had then led to the contract,” supervisory board Michael Fischer told the paper. “The fact is much more that we were in a predicament in which we had to make a decision under time pressure. We had no choice other than to vote for the improvements in Mr Claassen’s contract in order to protect the firm from immediate damage.”

The continuing fight between Claassen and his former employer is set to enter the courts this autumn when its law suit against him for the return of the €9 million and his counter-suit for a €7.1 million settlement will be heard by a Nuremberg-Fürth judge.

Solar Millennium has often held up as a great example of the future of green industry in Germany. It is constructing the biggest solar generating station in the world, which will cover 2,800 hectares in the Californian desert and will deliver the same amount of electricity as a nuclear power station. A pilot project is already running in Spain while China and India have indicated interest in similar sites.

The Local/hc