Mannesmann started life as a pipe-maker but this week, after 111 years in business, all that is left of the company is a street name, Mannesmann Quay in Dⁿsseldorf.

The Mannesmann name was lowered from the company's Dⁿsseldorf headquarters after the last annual general meeting on Wednesday. At the meeting, small shareholders accused the former Mannesmann board of being "crooks" and "looters in pinstriped suits".

Vodafone's 370 billion deutschmark (€148 billion) hostile takeover of Mannesmann 18 months ago was a reality check for German business. The shock of the takeover was matched only by the shock at the size of the pay-offs to Mannesmann executives.

In a country where large golden handshakes are rare and executive pay is closely tied to the shop floor, the size of bonuses paid to former Mannesman board members shocked even the high-flyers in the German business world.

Vodafone now controls 99.4 per cent of Mannesmann capital and it can force the last independent stockholders to accept settlement. Last Wednesday's annual general meeting was supposed to be a mere formality to vote to change Mannesmann's name to Vodafone. But proceedings were dominated by new developments in an investigation into the takeover started in February 2000 by lawyers acting on behalf of small Mannesmann shareholders.

They were suspicious of the nature of the takeover, particularly the way board members agreed to Vodafone's terms after an epic three-month struggle.

They accuse Mannesmann's managers of ignoring their best interests during the hostile takeover battle and hoisting the white flag a little too eagerly. When the news emerged of the record pay-outs to executives, it only strengthened their case.

At the heart of the investigation is the payment of special bonuses and pensions worth more than DM160 million to Mannesmann's board after Vodafone took over the company in February 2000. The bonuses were agreed by the Mannesmann board before they accepted Vodafone's offer and investigators want to know whether board members conspired to enrich themselves, defrauding their company and betraying the trust of shareholders.

Investigators expanded the scope of their inquiry last week to examine the role of Vodafone chairman Sir Christopher Gent.

According to Sir Christopher, Vodafone had no control over the nature of the severance payments to Mannesmann executives but was, nevertheless, obliged to meet the terms of the payments once the takeover was approved by the European Union in April 2000.

"Neither I nor other Vodafone managers or employees at any time made financial offers or incentives to Mannesmann employees," he said at Mannesmann's annual general meeting.

Investigators are also examining the role of the former deputy chairman of the Mannesmann board, Mr Klaus Zwickel.

Mr Zwickel, head of Germany's powerful IG Metall steelworkers' union, has always proudly described himself as "anti-business" and firmly opposed to "casino capitalism". But investigators believe he authorised the largest golden handshake in German business history.

Mannesmann chief executive Mr Klaus Esser was paid a record DM32 million bonus and additional severance pay of DM28 million when the takeover was complete. After details became public, Mr Zwickel said he knew nothing of what he called an "indecently high" golden handshake.

However, investigators have produced a protocol outlining the payments to be made to Mr Esser that bears Mr Zwickel's signature, even though he claims he abstained from the vote that approved the payments.

"Mr Zwickel, you are a hypocrite," shouted one man at the Mannesmann annual general meeting, summing up the attitude of small shareholders to the former Mannesmann board member.

Mr Zwickel contradicts the version of events given by Sir Christopher, that the company made no deals with Mannesmann executives.

A spokesman for Mr Zwickel said yesterday that a special bonus for Mr Esser had been "negotiated between Chris Gent and Esser" more than two months before the EU granted its approval for the takeover on April 12th last year.

Mr Esser agreed, saying the Vodafone board approved his severance package on February 3rd last year. He told business magazine Wirtschaftswoche: "Eighty to 90 per cent of the shareholders, and not only [large shareholder] Hutchison, were of the opinion that I had earned this bonus."

The idea for Mr Esser's bonus originated with Hutchison Whampoa, the Hong-Kong based property and telecoms conglomerate, whose shareholding in Mannesmann rose substantially in value during the takeover battle.

After consulting with the Vodafone board, Sir Christopher agreed that the bonus would be honoured if it was authorised by the Mannesmann board and if the takeover met EU approval.

The three-month struggle for control of Mannesmann was unprecedented in German business history but only the outcome of the ongoing investigation will determine if the DM160 million in bonuses paid to Mannesmann executives becomes the rule rather than the exception in future German corporate takeovers.

Vodafone added more fuel to the telecoms rebound, adding 3.1 percent after Hutchison denied a Financial Times report it was keen to dump its nearly 3.5 per cent stake in Vodafone.