German police carried out a dawn raid on the office and Cologne villa of Deutsche Post chief executive Klaus Zumwinkel yesterday on suspicion of large-scale tax evasion, writes Derek Scallyin Berlin

The raid was spectacular by German standards, the target being one of Germany's most influential executives.

In his 18 years as chief executive, Dr Zumwinkel (64) transformed Deutsche Post from a semi-state company to a publicly traded multinational operation with subsidiaries including the highly successful Postbank and logistics company DHL.

Shortly after 7am, police officers led the dazed, bespectacled executive away for questioning in front of television cameras, the climax of months of discreet investigation into Dr Zumwinkel's financial affairs.

He is suspected of having hidden at least €1 million from the German tax authorities in a foundation in Liechtenstein.

Last year, an informant is believed to have approached the German secret service with the information about Dr Zumwinkel which, if proven, could result in a five-year prison sentence.

The executive has said nothing about the charges and was released after several hours' questioning yesterday as investigators pored over boxes of files seized from his home and his office in Bonn.

A spokesman for Deutsche Post said that Dr Zumwinkel would remain in his position - for now. "He is completely able to carry out his duties, it's business as usual," said the spokesman.

Speculation was building last night that, after Dr Zumwinkel, other wealthy Germans are under suspicion of tax evasion.

German station ZDF alleged that the LGT Bank in Liechtenstein had aided many other wealthy Germans avoid tax through a complicated structure of foundations.

The allegations were grist to the mill of public service unions yesterday, as they began large-scale strikes for higher wages.

"If the suspicion is true, Klaus Zumwinkel cannot remain a minute more in office," said SPD business spokesman Rainer Wend.