Deutsche expects former directors to pay for ‘role in past misconduct’
Chairman says bank had been discussing the need for personal and collective responsibility
Deutsche Bank expects former board members to voluntarily pay substantial sums for their role in past misconduct which has tarnished the reputation of Germany’s biggest lender, its chairman Paul Achleitner said on Thursday.
Mr Achleitner told shareholders at Deutsche Bank’s annual general meeting that the supervisory board and two committees were discussing the need for personal and collective responsibility and the bank had sought external legal advice.
“The supervisory board expects that, in the coming months, there will be an arrangement which ensures that the individuals involved make a substantial financial contribution,” he said, adding that while no decision had yet been reached, discussions were at an advanced stage.
The talks are focusing on why Deutsche Bank’s own response was so slow, as well as its involvement in a series of financial scandals, Deutsche Bank sources said. Collective responsibility of the board for the company’s actions as a whole were at the centre of the talks, rather than personal failure or involvement in individual litigation cases, they added.
Mr Achleitner did not name any individuals, but Deutsche Bank sources said the supervisory board is in talks with around 10 people including former co-chief executives Anshu Jain and Jürgen Fitschen, as well as other former board members including Stephan Leithner, Rainer Neske, Henry Ritchotte, Stefan Krause and current board member Stuart Lewis.
Deutsche Bank said Lewis, who currently sits on the bank’s board, would not comment. Spokesmen for Jain and Neske said they would not comment. The other former Deutsche top managers did not respond to requests for comment
“We remain underwhelmed by Deutsche’s progress on culture,” said Hans-Christoph Hirt, head of investor and shareholder advisor Hermes EOS.
Andreas Thomae from fund manager Deka said: “We as investors are noticing the slow cultural change.”
If Deutsche Bank reaches settlements with former executives, it would mark a significant step in efforts to break with a turbulent period in the bank’s 147-year history.
Deutsche Bank transformed itself into a major player on Wall Street over the past two decades, but extravagant bets and poor conduct have resulted in a litigation bill of €15 billion since 2009. And while rivals spent the years after the 2008 collapse of Lehman Brothers cleaning up and finding new business models, Deutsche Bank was slow to restructure and improve compliance. – Reuters