Aryzta announced the appointment of the veteran executive Mr Steinemann in August, as part of Mr McGann’s efforts to renew Aryzta’s board. The company previously said his appointment would be put to a vote of shareholders at the meeting on December 7th.
It has emerged in recent days, however, that Mr Steinemann is being investigated by prosecutors in Dusseldorf after financial watchdogs became suspicious over a share transaction of his at Metro last year. He is the chairman of Metro’s supervisory board.
At the end of March 2016, Metro announced it would split its consumer electronics and food businesses, sending its shares up by more than 10 per cent. However, five weeks before this, Mr Steinemann notified the market of his purchase of €1 million worth of shares in the business, which soared in value weeks later after the split.
Prosecutors are reportedly investigating what, if anything, he knew of the business split plan prior to his share dealing, and whether the announcement of the business split could have been made sooner. The investigation is also focusing on the dealings of a handful of other executives at Metro, including its chief operating officer.
Metro says there was no wrongdoing.
Aryzta declined to comment when asked on Thursday to confirm its prior statement that Mr Steinemann’s appointment would be put to shareholders at the December meeting. It also would not comment when asked if he had warned Aryzta of the investigation of which he is subject in Germany. He is not currently listed as a director on Aryzta’s website.
It is expected Aryzta will formally announce the resolutions for its AGM next week. The company could look to head off the issue, however, with a separate announcement to investors about the issues surrounding Mr Steinemann before it announces resolutions.
The issue presents the first big corporate governance test for Mr McGann, who was appointed chairman less than a year ago. At the time of his appointment, he was urged to “stamp his authority” on Aryzta by analysts at SocGen, following a tumultuous period under its former chief executive, Owen Killian.
Next month’s AGM is also the first major public outing for Kevin Toland, who was appointed in recent months to replace Mr Killian.