Jörg Franke is quitting the executive board of Deutsche Borse and resigning from his post as chief executive officer of Eurex. Franke will step down at the end of the year, when he will also relinquish his roles as chief executive of Eurex Frankfurt and Eurex Clearing, and as general manager of the Eurex derivatives exchange.
The surprise announcement was made by Deutsche Borse and Eurex after a Supervisory Board meeting on Monday at which the Borse also decided to postpone its vote on the proposed merger with the London Stock Exchange. The LSE/Borse merger plans have been thrown into disarray by Swedish technology group OM, which has tabled a hostile bid for the LSE.
Franke, now 59, and one of the co-founders of Eurex predecessor DTB in 1989, denies that his decision to step down is related to the iX merger difficulties.
"My leaving is in line with my personal plans. It has nothing to do with the consolidation activities of Deutsche Börse, which I fully support," he says.
Deutsche Borse chairman, Rolf Breuer, comments: "Jörg Franke made an essential contribution to building up and expanding the worldwide derivatives markets. This also brought the development of Deutsche Borse Group a good step forward."
Franke will be replaced by Rudolf Ferscha a 39-year-old Austrian who is to be appointed chief executive officer of Eurex and the Eurex subsidiaries on October 4, 2000.
Ferscha, a lawyer and investment banker, became chief operating officer and finance director of Goldman Sachs, Germany, in 1998. From 1990-1997, he built up and managed First Austrian International, a regulated securities house in London, where his responsibilities included securities and derivatives sales and trading, risk management, credit, finance and human resources.
The announcement of Ferscha's appointment coincided with a decision to postpone an extraordinary general meeting (EGM) scheduled for this Thursday, at which shareholders were to vote on the planned merger with the London Stock Exchange. No new date has been set as yet.
Breuer says the Borse is keeping its strategic options open. "The merger of Deutsche Borse and London Stock Exchange is still the most attractive option from Deutsche Borse's point of view," he affirms.
Responding to recent domestic criticism about the value of the iX merger to the German financial community, the Borse released the results of a study indicating that if only half of the business potential of a proposed new European growth market can be concentrated in Frankfurt, this can be expected to generate over 60,000 jobs in IPO-related business by the year 2005.
"The entire technological development of iX-international exchanges will be concentrated in Frankfurt," says the Borse in a statement. "This means that all of the investments already planned for future-oriented technology in Frankfurt and the considerable size of future investments in the development of new market systems and functionalities will be entirely to the benefit of Frankfurt's economic development."
All activities in e-commerce (B2B) will also be concentrated at the Frankfurt location, the Borse adds.