Deutsche Bank Co-CEO, ex-officials cleared in fraud case2 min read . Updated: 25 Apr 2016, 04:54 PM IST
The bank executives were accused of deceiving judges in a civil lawsuit filed by late Leo Kirch, the German media mogul, seeking 2 billion
Berlin: Deutsche Bank AG co-chief executive officer Juergen Fitschen and four former bank officials were acquitted of charges that they lied to judges during a decade-long dispute with a German media mogul.
The men were cleared after almost one year of trial at a Munich court Monday. The charges against defendants including former CEOs Josef Ackermann and Rolf Breuer had been questioned by Presiding Judge Peter Noll for weeks.
The verdict is another setback for German prosecutors in a high-profile white-collar criminal trial. Last month, former Porsche chief executive officer Wendelin Wiedeking and ex-chief financial officer Holger Haerter were cleared by a Stuttgart court of charges they manipulated Volkswagen AG shares during a failed 2008 takeover.
“At the beginning there were certainly clear suspicions of wrongdoing, so it was legitimate to bring the charges and hold the trial according to the rule of law," Noll said. “No one needs be ashamed about that. But after one year of trial they couldn’t be confirmed."
The Deutsche Bank executives were accused of deceiving judges in a civil lawsuit filed by Leo Kirch, who died in 2011, seeking €2 billion ($2.25 billion). Kirch claimed that Breuer caused his media company’s demise when questioning its creditworthiness in a Bloomberg Television interview that aired 4 February, 2002.
Noll roundly rejected theories submitted by prosecutors that the interview was part of a plan to drive Kirch into bankruptcy and allow the bank to seek the company’s restructuring work.
“You don’t kick someone in the shins to make him do business with you," Noll said. “That’s preposterous."
Deutsche Bank’s legal disputes and fines for past misconduct have sapped its reserves as regulators ratchet up capital requirements as a response to the 2008 financial crisis. The Kirch dispute diverted the attention of the company’s senior management at a time when banks are trying to renew their business models to cope with record low interest rates and disruption brought by digital technology.
While the underlying civil suit was eventually rejected, judges in that case said that Breuer, then-CEO Ackermann and two other managers lied to them. That comment prompted Munich prosecutors to open a probe in 2011 that led to several raids at the bank’s Frankfurt headquarters. Fitschen was added as a suspect in 2013.
The pressure from the criminal probes prompted Deutsche Bank to settle with Kirch’s heirs in 2014 after more than a decade of civil litigation. Deutsche Bank agreed to pay the family nearly €928 million and the matter has cost the bank a total of €1 billion, according to the invitation to the company’s annual shareholder meeting in May.
Prosecutors had asked the court to sentence Ackermann to 2 1/2 years and Breuer to 3 1/2 years. Prosecutors also wanted the bank to pay a 1 million-euro fine. For Fitschen, who is scheduled to step down as co-CEO 19 May, prosecutors sought a 15-month suspended sentence and a 21-month suspended sentence for former chairman Clemens Boersig. Bloomberg