Deutsche Bank chief executive Dr Josef Ackermann will stand trial accused of organising illegal pay-offs worth €74 million to secure Vodafone's hostile takeover of Germany's number two mobile phone operator in 2000.

Düsseldorf state court yesterday cleared the way for Dr Ackermann and five other board members, including former union leader Mr Klaus Zwickel to stand trial. Also facing charges is the former Mannesmann chief executive Mr Klaus Esser.

Management and directors of Deutsche Bank said yesterday that Germany's largest financial institution was standing by its chief executive of 16 months.

"Dr Ackermann will defend his integrity and his actions during the Vodafone-Mannesmann takeover with utmost vigour," the statement said.

Dr Ackermann has repeatedly denied the charges surrounding the €148 billion takeover battle, still a record in German business history. Recently, he said he was confident judges would dismiss the case and warned that the trial would hurt Germany's image among multinationals. If found guilty, the board members could face a minimum jail sentence of six months and a maximum of 10 years.

Lawyers acting on behalf of small shareholders began an inquiry into the takeover in February 2000. They were suspicious of the takeover, particularly the way board members suddenly agreed to Vodafone's terms after an epic three-month struggle. Shareholders accused Mannesmann's managers of ignoring their best interests, accusations that were strengthened after news emerged of the record pay-outs to executives.

Mr Esser was paid a record €15 million bonus and additional severance pay of €14 million while €43 million was paid to other managers. 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 Mannesmann board members shocked even the high-flyers in the German business world.

News of the pay-offs caused a scandal in German media and political circles and consternation among Mannesmann shareholders, who accused the board of being "looters in pin-striped suits". The bonuses were agreed by the Mannesmann board before they accepted Vodafone's bid and prosecutors will hope to prove that board members conspired to enrich themselves, defrauding their firm and betraying the trust of shareholders. Former Vodafone chief executive Sir Chris Gent was cleared by prosecutors during their inquiry.