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Chairmen resign in wake of PGGM-led shareholder revolt

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EUROPE – The chairman of the supervisory board and the executive chairman at German property fund GSW Immobilien have resigned following pressure from shareholders initiated by the €140bn Dutch asset manager PGGM.

In the wake of the announcement, the value of GSW's listing on the German midcap index MDAX increased by 5%, according to PGGM, which has a 3% stake in the company.

Earlier this month, almost 70% of shareholders supported PGGM's call for the chairman of the supervisory board, Eckart John von Freyend, to step down.

The asset manager also rallied 63% of shareholders behind its proposal for a no-confidence vote for GSW's new chief executive, Bernd Kottmann.

In PGGM's opinion, Kottmann's appointment was "opaque".

It added that Von Freyend ignored repeated requests for additional information on the appointment procedure.

It also questioned Kottmann's profile, as well as the independence of both the selection committee and the supervisory chairman.

The asset manager said: "Von Freyend and Kottmann were on the board of the property company IVG Immobilien when it ran into great difficulties in 2008 under their management."

GSW's supervisory board said Von Freyend would leave on 31 July, and that Kottmann resigned with immediate effect.

It also said it would hire an independent expert to investigate the selection procedure.

PGGM said it considered the resignation an important development for the German property sector and corporate governance in the country.

Maurice Wilbrink, spokesman at PGGM, said: "We expect this development will increase dialogue between shareholders and companies, and that it will make Germany more attractive to foreign investors."

PGGM is asset manager for five Dutch pension funds, including the €134bn healthcare scheme PFZW, which pays much attention to ESG issues.

GSW's outgoing supervisory chairman said he accepted the "political responsibility" for the voting result.

"The welfare of the company is my paramount concern," said Von Freyend, adding that the supervisory board would immediately seek a new and stable management structure.

Until a final decision is made, board members Jörg Schwagenscheidt and Andreas Segal will run GSW's business.

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