ThyssenKrupp AG chairman Gerhard Cromme has resigned from the German steelmaker's supervisory board after coming under fire for a botched multibillion-euro project in the Americas.
The announcement on Friday was unexpected, coming after a defiant Mr. Cromme had resisted shareholder pressure to step down in January when he admitted at the company's annual meeting that he had made mistakes that contributed to massive losses.
"The timing is surprising. He could have had it easier had he made this move before the annual general meeting," said Hans-Christoph Hirt, of Hermes Fund Managers, which had called for change on the supervisory board at the AGM.
Shares in ThyssenKrupp were up 6.4 per cent by the market close.
Mr. Cromme, who turned 70 last month, will leave his post on March 31, after 12 years at the helm of the supervisory board.
He said in a statement that he was stepping down to support "renewal" of the supervisory board. A spokesman for ThyssenKrupp said that he could not yet give any indication of when a new chairman would be appointed.
ThyssenKrupp has been dogged by scandal in recent years and chief executive Heinrich Hiesinger axed half his management board late last year, vowing to put an end to "old boys' networks."
Union Investment portfolio manager Ingo Speich said that Mr. Hiesinger, who was brought in by Mr. Cromme two years ago, will need the backing of the next chairman or his reforms could fail.
Mr. Cromme joined Krupp in 1986 and as chief executive oversaw the steel maker's mergers with Hoesch and Thyssen. As chairman of the supervisory board he approved major strategic decisions including investments in the Americas.
The Steel Americas project, comprising two steel mills in Brazil and Alabama, cost much more than expected to set up and has generated losses since. CEO Mr. Hiesinger is now trying to sell the mills.
German shareholder rights group DSW said that it welcomed Mr. Cromme's resignation, though a spokesman added that it was also "a little bit tragic that 'Mr. Steel' is leaving the bridge."
Despite the recent criticism of Mr. Cromme, it was thought unlikely that he would be forced out because he had the backing of Berthold Beitz, the 99-year-old patriarch of ThyssenKrupp's biggest shareholder.
The Alfried Krupp von Bohlen und Halbach Foundation headed by Mr. Beitz holds 25.3 per cent of the voting rights and has the right to appoint three of the 20 members on the supervisory board.
But ThyssenKrupp said on Friday that Mr. Cromme is also stepping down as vice-chairman of the board of trustees and as a member of the foundation, meaning that Mr. Beitz will have to find a new crown prince as well as a new representative for ThyssenKrupp's board.
Mr. Cromme also chairs the supervisory board of engineering conglomerate Siemens AG, which declined to comment on his resignation at ThyssenKrupp.