MobilCom 'to discuss CEO future'

FRANKFURT, Germany -- The supervisory board of MobilCom plans to meet to discuss whether to fire its chief executive, according to reports.

Gerhard Schmid, the founder of the struggling German mobile phone operator, admitted last week that he broke the country's securities rules when he paid a company owned by his wife 68 million euros ($64 million) for share options.

The relationship between Schmid, who owns about 40 percent of MobilCom, and shareholder France Telecom (PFTE) has been strained over the company's strategy. France Telecom initiated the investigation into Schmid and his share dealing with his wife.

France Telecom, which owns 28.5 percent of MobilCom through its mobile phone operator Orange (PORA), wanted Schmid to resign if he did not pay back the money by midnight on Thursday and agree to other changes, the Wall Street Journal said.

France's dominant phone operator has an agreement to buy out Schmid for 22 euros a share.

But France Telecom is under pressure from investors not to take on more debt. The acquisition would add 6.1 billion euros to its ballooning 61 billion euro debt pile.

France Telecom has been in talks with MobilCom's creditors to reschedule its debt and buy out Schmid and his wife. The creditors would then hold the stake until France Telecom was able to sort out its own finances.