By Dave Graham
BERLIN (Reuters) - Klaus Zumwinkel was set to quit as chiefexecutive of German mail group Deutsche Post on Friday as atax-dodging probe threatened to ensnare more rich Germans.
Zumwinkel's offer to resign will be accepted at asupervisory board meeting on Monday, a finance ministryspokesman told a news conference, adding he expected Zumwinkelto quit as chairman of Deutsche Telekom as well.
Deutsche Post had no immediate comment.
The 64-year-old, a pillar of Germany's corporateestablishment who has led Post for 18 years, came underpressure to go after prosecutors said they suspected him ofdodging about 1 million euros (764,000 pounds) in taxes bytransferring money to tax haven Liechtenstein.
Kurt Beck, chairman of Germany's Social Democrats, saidearlier on Friday Zumwinkel should "either resign immediatelyor be fired immediately", while Finance Minister PeerSteinbrueck said the probe had caused considerable "moraldamage".
Hundreds more rich and prominent Germans faced a visit fromthe police after prosecutors investigating tax evasion gotextensive data about offshore bank accounts in Liechtenstein,Germany's Handelsblatt newspaper reported.
It was unclear how prosecutors got their hands on thedocuments about accounts at LGT, the paper reported, but itquoted one unnamed investigator as saying: "We cracked theentire bank."
UNDER FIRE
LGT spokesman Bernd Junkers in Liechtenstein said the bankcontrolled by the tiny principality's princely family had takennote of the report but could not comment further.
"Clarifications that concern LGT Treuhand AG based in Vaduzare under way," he said, adding LGT Treuhand is an independentunit of LGT Group responsible for setting up foundations.
German prosecutors had said on Thursday that several morepeople were under investigation.
Named by Manager Magazin as its 2003 manager of the year,multi-millionaire Zumwinkel transformed Post from a sleepystate monopoly to a global mail, logistics and finance group.
The former McKinsey partner has led the group since 1990,presiding over its flotation in 2000 and taking the helm ofDeutsche Telekom's supervisory board in 2003.
Steinbrueck said that the prosecutors' investigations ofZumwinkel had damaged the economic and social fabric ofGermany.
"The moral damage is considerable, just as it was with hisdealing with his share options," Steinbrueck told a group ofjournalists in Berlin, referring to profits Zumwinkel made inDecember when a new minimum wage for postal workers threatenedto drive Deutsche Post rivals out of business and cost jobs.
"If the public has something like this as a role model thenthey'll start having doubts about this economic and socialsystem. I didn't think this was possible," Steinbrueck said.
State development bank KfW owns 31 percent of DeutschePost.
Zumwinkel had said last year he would decide on his futurewith Post in mid-2008 as his contract runs out in November.
Zumwinkel has sought to reduce the company's dependence onits domestic mail business by expanding its DHL express andlogistics divisions and through acquisitions.
But he has struggled to reverse losses at DHL Express'sbusiness in the United States, and has signalled he could sellretail bank unit Deutsche Postbank.
Also this week, Liechtenstein bank LLB said it had beentargeted by a blackmail campaign since 2003 after an employeethreatened to reveal account details of German clients.
LLB said the employee was arrested and sentenced in 2004 --and still remains in prison -- but that an accomplice continuedthe blackmail campaign. One person was arrested in Septemberand remains in investigative custody in Germany, LLB said.
(Additional reporting by James Regan in Frankfurt, SvenEgenter in Zurich and Tom Kaeckenhoff in Duesseldorf; Editingby Louise Ireland)