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Deutsche Bank money-laundering inquiry spurs wave of raids

Suspects’ homes were raided Wednesday as well as offices of 11 banks, four tax advisers and six asset-management companies

Christian Sewing, CEO of Deutsche Bank. Reuters
Christian Sewing, CEO of Deutsche Bank. Reuters

A German money-laundering probe looking at Deutsche Bank brought a wave of raids by Frankfurt prosecutors targeting eight wealthy individuals who may have hidden money in offshore companies.

The suspects’ homes were raided Wednesday as well as offices of 11 banks, four tax advisers and six asset-management companies in an investigation into tax evasion, Frankfurt prosecutors said. It didn’t identify the banks, people or companies concerned. Once the raids are completed, prosecutors said, more information will be disclosed.

The case is related to searches of Deutsche Bank made in November. That money-laundering probe stems from the 2016 disclosures known as the Panama Papers and focuses on a former unit in the British Virgin Islands that processed €311 million (Dh1.27 billion) in 2016 alone.

Deutsche Bank is one of the companies that were subject to searches, according to a source.

Deutsche Bank spokesman Christian Streckert didn’t immediately reply to a Bloomberg email seeking comment.

The latest twist in the Duetsche Bank inquiry comes as bank executives are likely to face angry shareholders at an annual general meeting on May 23 when their names could be added to a growing list of top managers denied investor backing, according to media reports and insiders.

Around 5,000 of the financial firm's owners are expected at the Frankfurt gathering, which regularly sees small shareholders call bosses to account.

Deutsche Bank's executive team, led by Christian Sewing since last April, and the supervisory board, under Paul Achleitner, have both faced sharp criticism ahead of the AGM.

Major investor advisory firms Glass Lewis and ISS have urged shareholders not to endorse either board's performance in 2018, daily Frankfurter Allgemeine Zeitung (FAZ) reported last week.

"Since the bank hasn't demonstrated that it's able to earn enough to cover its costs of capital in recent years, I'd tend to advise against" voting in favour, Markus Kienle, a Frankfurt-based lawyer who represents small stock owners, told AFP.

In a letter sent to clients, ISS says the bank has suffered self-inflicted wounds to its reputation, especially with failings in sniffing out money laundering, as well as booking weak financial performance.

Deutsche responded that the report "does not reflect the current situation of our bank and its control environment" regarding risks.

Updated: May 15, 2019 02:27 PM



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