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CEO probe adds to Deutsche woes

Tuesday, November 05, 2013 - 01:52

Nov. 5 - Deutsche Bank has new legal woes after German prosecutors named the bank's Co-Chief Executive Juergen Fitschen as a suspect in a dispute over the collapse of the Kirch media empire. Sonia Legg reports.

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Deutsche Bank insists Juergen Fitschen will be cleared. But the naming of its co-CEO as a suspect in a dispute over the collapse of the Kirch media empire doesn't come at a good time. German prosecutors have now linked Fitschen to the decade-old civil suit. In 2002 the late media mogul Leo Kirch blamed the bank for his company's downfall after the then CEO questioning its creditworthiness on tv. A Munich judge ruled in Kirch's favour last year - and a final settlement is yet to be determined. (SOUNDBITE) (German) SPOKESMAN FOR MUNICH I STATE PROSECUTOR'S OFFICE, SENIOR STATE PROSECUTOR THOMAS STEINKRAUS-KOCH, SAYING: "We came to the conclusion that Mr. Fitschen could be responsible for presenting wrong facts to the heirs of Dr. Leo Kirch in the civil suit against Deutsche Bank." The case is the latest in a series of inquiries at Germany's flagship lender. Frankfurt trader Peter Helmer says they're clearly hampering business. (SOUNDBITE) (German) TRADER WITH HAUCK AND AUFHAEUSER BANK, FIDEL PETER HELMER, SAYING: "Unfortunately, there has been repeated bad news about Deutsche Bank. There is hardly a scandal the bank's not involved in and this latest information will definitely have negative consequences for shares." And then there's the cost of litigation. In the third quarter of 2013 alone the bank booked 1.2 billion euros in legal costs, wiping out profit for that period. It took the total legal provision to 4.1 billion euros. The list of cases is lengthy. Deutsche is one of nine banks being sued by U.S. mortgage company Fannie Mae. Unlike other European lenders it's yet to reach a settlement over Libor rate rigging And Fitschen is one of 25 bank employees being investigated on various charges relating to trading in carbon emission permits. Deutsche had already warned investors to brace for costly settlements. No surprise then that this new case has also raised feared that management could be distracted from their core business by the inquiries.

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CEO probe adds to Deutsche woes

Tuesday, November 05, 2013 - 01:52