Deutsche Telekom chief executive Dr Ron Sommer is likely to start clearing out his desk today after apparently losing his struggle for survival over the weekend.
He is expected to be replaced by Mr Gerd Tenzer, head of Telekom's technological and networking arm, at a meeting of the supervisory board tomorrow.
The boardroom battle, unprecedented in the civilised world of German business, was brought on by the collapse of Telekom shares, now worth less than the issue price in 1999, and compounded by September's general election.
Dr Sommer had survived innumerable resignation calls in the past because he had the backing of Berlin.
But last week the German government, the largest Telekom shareholder with a 43 per cent stake, withdrew its support after the opposition turned the Telekom shares into an election issue.
The government, trailing 4 per cent in the opinion polls, decided it was time to sacrifice Dr Sommer to appease the three million angry Germans who lost money on Telekom shares.
The tactic may win votes for Mr Gerhard Schröder's Social Democrats but Telekom staff have complained that interference from Berlin may damage Telekom's standing abroad as an independent company.
"Deutsche Telekom has apparently become the centre of election campaign disputes, and that threatens to do significant damage," said over 18,000 employees in a newspaper advertisement paid for by the firm.
The government gave an undertaking not to interfere in company decision-making when Telekom was floated on the New York Stock Exchange.
"At the end of this saga there are only losers. Telekom has become a political football," said news magazine Der Spiegel yesterday.
Mr Gerd Tenzer (59) was the lead contender for the post of chief executive last time around in 1995, only to be beaten by Dr Sommer. Despite working for Telekom for 30 years, Mr Tenzer is viewed as just a caretaker manager until a permanent chief executive can be found. Chancellor Schröder denied yesterday that he exerted any pressure on the board to replace Dr Sommer, whom he had defended as recently as last month.
But it was clear last week that the chancellor had lost confidence in the Telekom chief executive when he walked away from television cameras rather than answer questions about Dr Sommer's future.
"The board must have trust in its chairman. If not, the board has to make decisions," said Mr Schröder yesterday.
Last Friday he summoned his Finance Minister, Mr Hans Eichel, back from his summer holidays to help draw up a list of potential Sommer successors.
The list was a who's-who of German business but, according to the Frankfurter Allgemeine Zeitung newspaper, everyone on the list declined the job. "Why should they react differently when the government takes over the board's independence?" wrote the newspaper.
The Deutsche Telekom partial flotation in 1996 created a shareholder culture in Germany overnight when more than three million people bought shares for €14 each. After reaching a high of €104 during the tech boom two years ago, the shares have since lost 90 per cent of their value and dropped below their issue price earlier this year.
