GERMANY - The surprise dismissal of Günter Schulze as chief executive of Babcock Pensionskasse followed his misrepresentation of the pension fund’s investments, sources say.

Last week, IPE reported that Schulze had suddenly been ousted as CEO of the €460m fund.

According to people familiar with events, Schulze provided inaccurate information to BPK’s supervisory board about the extent of the fund’s equity and fixed income holdings. “He told the board that certain monies were invested in fixed income when in fact they were invested in equities,” these people said.

When the supervisory board discovered that the information was wrong earlier this month, it immediately stripped Schulze of his responsibilities and put him on indefinite leave, the people said. They added that as per German law, BPK’s supervisory board informed German regulator BaFin of the move.

BaFin declined to comment.

However, BPK confirmed to IPE that during a meeting last night, its supervisory board decided not to renew Schulze’s contract, which expires on December 31. Until then, he will remain on leave. The pension fund had no further comment on why Schulze was dismissed.

Under BPK’s strategic asset allocation, 19% of its assets are invested in domestic and international equities, while 70% is invested in domestic bonds. Another 11% of BPK’s portfolio is invested in real estate.

It was not immediately known how exactly Schulze represented the pension fund’s investments to the supervisory board.

BPK was the pension fund for engineering group Babcock, which went bankrupt in late 2002 – after which the fund sought to reinvent itself by opening itself to all industries.

BaFin gave the go-ahead to BPK’s transformation into an industry-wide fund in April 2003, and the fund aims to target German small and midsize enterprises in particular. To date, BPK has a total of 12,000 members and 6,600 pensioners.