Heckler & Koch shareholders' meeting canceled
For five years, there has been a power struggle among the largest shareholders at Heckler & Koch's weapons factory. The case is now before the Federal Court of Justice. It's about shareholder rights, influence, and the decision-making power of the annual general meeting. Meanwhile, the company is doing well in terms of business.
At Heckler & Koch, a power struggle between two major shareholders continues to cause unrest. The annual general meeting in Rottweil was disrupted due to an application by the lawyer of one of the shareholders. The reason was that the necessary attendance quorum of slightly over 50% of the share capital was not reached. As a result, the chairman of the supervisory board, Rainer Runte, had to prematurely end the ongoing meeting. The annual general meeting must now be held again within three months.
Meanwhile, the largest manufacturer of handguns announced figures for the first quarter of 2024: While the revenue increased by 1.8 million euros to 75 million euros on an annual basis, the net profit dropped from 10 million euros to only 2.4 million euros. The company attributed the development to seasonal fluctuations: Some orders had delivery dates and revenue and profit effects outside of the first quarter. CEO Jens Bodo Koch remained optimistic, however, that the growth trend of previous years would continue. The company is expected to grow by more than 100% in terms of revenue in 2024 compared to the previous year, and the operating result (EBITDA) is expected to be higher than the previous year's value, the manager said.
Who owns 15 million shares?
The conflict, which has escalated since 2019, has been going on in various courts ever since. Both parties have been pulling out all the stops. It's about the German investor Andreas Heeschen, who was the majority shareholder for a long time, and about the Luxembourg financial holding CDE. Heeschen allegedly transferred 15 million shares to CDE, according to CDE's statements, for 163 million euros.
At a certain point, the CDE demanded the transfer of the shares. According to their legal understanding, the ownership and thus the voting rights had passed to the CDE at the end of 2019. Heeschen saw it differently, he still saw himself as the owner of the shares. A legal dispute before the Regional Court and the Higher Regional Court Frankfurt ensued. Since Heeschen appealed to the Federal Court of Justice (BGH), there is still no legally binding judgment.
No decision on personnel matters possible
Due to this unresolved legal issue, the chairman of the supervisory board, Runte, decided not to allow a contentious share package of almost 40% of the share capital to be put to a vote at the annual general meeting - neither for CDE nor for Heeschen. He assumed, however, that Heeschen would still participate in the meeting with another, smaller share package. Since this did not happen, only 48% of the shares were represented at the shareholders' meeting. As a result, Runte pulled the emergency brake and canceled the annual general meeting. Representatives of CDE were outraged by the actions of the German investor.
Heeschen was not present at the annual general meeting. He wanted to exchange two supervisory board members, who sit for CDE in the supervisory board, with his own. However, he would have had to have the voting rights from the 40% share package for this. This did not work out. As a result, he caused the entire annual general meeting to fail.
Heckler & Koch had around 1100 employees last year and generated a revenue of over 301 million Euro. Around 1000 people work at the headquarters in Oberndorf in the northern Black Forest. Among the competitors are C.G. Haenel from Thuringia, Beretta from Italy, FN from Belgium, and the Czech gunsmith CZ, to which the US company Colt also belongs. The largest H&K customer is the Bundeswehr, which will receive a total of 120,000 new assault rifles from Oberndorf in the coming years.
The ongoing legal dispute between German investor Andreas Heeschen and Luxembourg financial holding CDE, stemming from the transfer of 15 million Heckler & Koch shares in 2019, has hindered decisions at the Annual General Meetings. Despite the company's strong business performance, with a 1.8 million euro revenue increase and expected growth in 2024, the uncertainty surrounding shareholder ownership has disrupted voting processes and prevented key decisions, including personnel matters.
