Thyssenkrupp investor Elliott demands appointment of new 'external' CEO

FRANKFURT (Reuters) - Thyssenkrupp <TKAG.DE> should replace Guido Kerkhoff as chief executive with a new external candidate, activist investor Elliott Associates told the company's supervisory board as it pressed its case for a change of leadership and strategy.

Kerkhoff was named acting CEO after Heinrich Hiesinger resigned this month. Chairman Ulrich Lehner also quit this week, removing a leadership duo that had resisted investor calls to restructure the industrial conglomerate.

Kerkhoff should be seen only an interim solution, Elliott said in a letter sent to the company's supervisory board.

"Shareholders expect an unbiased search for a new external CEO, driven by what is best for the company and all of its stakeholders, including shareholders," the letter, which Elliott made available on Thursday, said.

Elliott said Kerkhoff's installation as interim CEO provides the company with a measure of stability for the company.

"However, this interim period must be kept short so that Thyssenkrupp may quickly be set on a path to prosperity and growth," Elliott said.

Thyssenkrupp should continue on a path of "structural evolution" Elliott said, explaining that it had never demanded a wholesale dismantling of the conglomerate and that it was very disappointed with the terms of a deal struck with Tata Steel <TISC.NS>.

Elliott has a stake of below 3 percent in the German company according to its latest filing. Swedish activist investor Cevian also holds an 18 percent stake.

Elliott urged Thyssenkrupp's management to distance itself from remarks made by Lehner, the outgoing chairman, who in an interview with the Die Zeit weekly accused activist investors of engaging in "psycho terror".

Elliott denied it had harassed families and neighbours of Thyssenkrupp executives, or spread lies, and that it had merely acted as a concerned investor, the letter said.

"It would be appropriate for the company and the supervisory board to distance itself from Professor Lehner's defamatory remarks by publicly stating that the company does not support them and does not view them as truthful," the letter said.

(Reporting by Edward Taylor; Editing by Douglas Busvine)