DaimlerChrysler knew in advance Schrempp would go, watchdog claims

Reuters / FRANKFURT (Reuters) -- DaimlerChrysler knew nearly three weeks before an official announcement that former CEO Juergen Schrempp was likely to step down, Germany's financial regulator BaFin has determined.

The finding is outlined in a letter obtained by Reuters that BaFin sent in 2005 to Stuttgart prosecutors. It has a bearing on lawsuits filed by investors who say they lost money by selling DaimlerChrysler shares just before news Schrempp would leave.

The surprise announcement of July 28, 2005, sent DaimlerChrysler stock shooting around 10 percent higher.

The BaFin letter noted that a handful of people at the world's fifth-biggest carmaker were aware of Schrempp's plans to leave before a supervisory board meeting on that day which cemented his departure and named Dieter Zetsche his successor.

"The decision that Schrempp would end his contract at the end of 2005 had been made with strong likelihood on July 10, 2005, at the latest," the letter states. That was when the company began drafting a news release and staff announcement, it said.

Insider trading investigations into the case have been dropped but around 60 investors are seeking compensation for what they see as getting word out too late of Schrempp's leaving.

A ruling is due by mid-February.

The Stuttgart judge handling the case said in December the matter hinged on when the information about Schrempp's departure was concrete and probable enough to warrant releasing.

A DaimlerChrysler spokesman said the company was convinced it had fully met its obligations. It has said it could not have released the information before the supervisory board approved the move.