Gunsmith - Power struggle: Heckler & Koch shareholders' meeting canceled
An internal power struggle between two major shareholders is causing continued unrest at gun manufacturer Heckler & Koch. At the request of one of these shareholders' lawyers, the annual general meeting in Rottweil was disrupted. The reason was that the necessary attendance of more than 50% of the share capital was not achieved. Consequently, the chairman of the supervisory board, Rainer Runte, had to cancel the already started meeting. The meeting must now be held again within three months, without the 50% attendance requirement.
The shareholders have been in a prolonged standstill since 2019, with each other in several courts. It's about the German investor Andreas Heeschen, who had been the majority shareholder of the largest German handgun manufacturer for a long time. However, he then transferred the largest part of his share package to the Luxembourg financial holding CDE in exchange for credits.
Judgment on majority ownership still pending
At a certain point, CDE demanded either the repayment of the money or the transfer of the shares. Since the money was not forthcoming, they wanted the shares. According to their legal understanding, the ownership and thus the voting rights had passed to CDE at the end of 2019. A legal dispute arose before the Frankfurt Regional Court and the Frankfurt Higher Regional Court. Since Heeschen appealed to the Federal Court of Justice (BGH), there is no legally binding judgment yet.
Due to this undecided legal issue, the supervisory board chairman Runte decided not to allow the contested share package, which represents almost 40% of the share capital, to be put to a vote at the annual general meeting - neither for CDE nor for Heeschen. However, he assumed that Heeschen would still participate in the meeting with a smaller share package. Since this did not happen, only 48% of the share capital was represented at the shareholders' meeting.
Representatives of CDE expressed their indignation over the actions of the German investor. "This shows that Mr. Heeschen is trying to enforce his alleged own claims on the back of the company, causing costs and unnecessarily tying up resources of the company," said CDE representative Andreas Gregor to the dpa. He pointed out that Heeschen had not fulfilled his obligations under the pledge agreements - Heeschen had pledged a total of 15 million shares for 163 million euros according to CDE since 2015. "Despite repeated requests, he neither transferred the shares nor paid off the debts, which have been due since the end of June 2022."
Heeschen was personally not present at the annual general meeting. He wanted to exchange two supervisory board members, who sit on the supervisory board for CDE, with his own. However, he would have needed the voting rights from the 40% share package for this. This did not work out. Consequently, he caused the entire annual general meeting to fail.
- The ongoing power struggle between Heeschen and CDE in Heckler & Koch's defense industry has reached the Federal Court of Justice in Germany, with a judgment on majority ownership still pending.
- The disrupted Annual General Meeting in Rottweil was a direct result of this power struggle, as the necessary share capital attendance was not met due to the legal dispute between the two major shareholders.
- Located in Baden-Württemberg, Heckler & Koch's annual general meeting saw tensions rise as representatives from CDE criticized Heeschen's actions, citing violations of pledge agreements and delayed debt repayments.
- With the power struggle between the two shareholders affecting the defense industry giant Heckler & Koch, it remains to be seen how the situation will unfold and when a resolution will be reached.
