As shareholders consider launching an investigation into management's response to scandals that have cost it billions of euros in fines, sharp criticism awaits the Deutsche Bank's chairman at the bank's annual general meeting on Thursday.
An opportunity to challenge Paul Achleitner's actions since he took over as chairman in 2012 would be presented by the meeting to the investors who are infuriated by shrinking profits and a dramatic fall in the bank's stock price.
Investors were urged to back a shareholder motion for a probe into whether fines for wrongdoing were higher at Deutsche because management obstructed or misled investigators by Shareholder advisory groups ISS and Glass Lewis.
Alleging that that a hefty penalty as imposed on Deutsche as the bank had had 'repeatedly' misled it, the United Kingdom's Financial Conduct Authority fined Deutsche for the manipulation of lending benchmarks Libor and Euribor last year.
Georg Thoma, a non-executive director at Deutsche who was investigating earlier scandals but left after coming under public fire from fellow directors for being overzealous, has resigned a few weeks ago and the meeting comes close on the heels of that development.
"I want to know what substance these allegations have," said Klaus Nieding from retail investor association DSW.
Although shareholders were unlikely to demand the chairman go immediately, it was possible that Achleitner could leave later this year, said one large investor, who spoke on condition of anonymity.
"Achleitner will likely prevail at this year's AGM, but I would not be surprised if he is replaced some time later this year," the investor said.
"He's a good organizer, very consensus-oriented. But the bank has been in a permanent crisis mode for a long time and needs someone who puts his foot down," he said.
The investor added that Achleitner was seen as a member of the old guard and responsible for the bank's current condition.
A sudden change could back fire even though the supervisory board's choices had often been unsatisfactory, said a second investor.
"If we kill the supervisory board now, that would further destabilize the bank. That would be a step backwards," he said.
However Achleitner has been recently backed by the Qatari royal family, the second largest investor at Deutsche.
While claiming that he would run for another term if there were an election this year, Achleitner himself has said that no large shareholder had demanded he step down while giving an interview to a magazine last month.
Deutsche bank declined to comment ahead of Thursday's AGM.
Litigations following a series of scandals is one of Deutsche's biggest problems. Bills of 12.6 billion euros ($14.21 billion) have already been nit by the bank as payments for fines and lawsuits since 2012. Just for the charge of manipulation of interbank rates such as Libor, Deutsche has paid more than $3 billion in fines.
There has been am over haul at the bank where the top management was replaced and the settlement of legal action and cutting costs have been fast-tracked by the chief executive, John Cryan, who took on that role less than one year ago.
"We are giving Cryan the benefit of the doubt," said a large investor.
(Source:www.reuters.com)
An opportunity to challenge Paul Achleitner's actions since he took over as chairman in 2012 would be presented by the meeting to the investors who are infuriated by shrinking profits and a dramatic fall in the bank's stock price.
Investors were urged to back a shareholder motion for a probe into whether fines for wrongdoing were higher at Deutsche because management obstructed or misled investigators by Shareholder advisory groups ISS and Glass Lewis.
Alleging that that a hefty penalty as imposed on Deutsche as the bank had had 'repeatedly' misled it, the United Kingdom's Financial Conduct Authority fined Deutsche for the manipulation of lending benchmarks Libor and Euribor last year.
Georg Thoma, a non-executive director at Deutsche who was investigating earlier scandals but left after coming under public fire from fellow directors for being overzealous, has resigned a few weeks ago and the meeting comes close on the heels of that development.
"I want to know what substance these allegations have," said Klaus Nieding from retail investor association DSW.
Although shareholders were unlikely to demand the chairman go immediately, it was possible that Achleitner could leave later this year, said one large investor, who spoke on condition of anonymity.
"Achleitner will likely prevail at this year's AGM, but I would not be surprised if he is replaced some time later this year," the investor said.
"He's a good organizer, very consensus-oriented. But the bank has been in a permanent crisis mode for a long time and needs someone who puts his foot down," he said.
The investor added that Achleitner was seen as a member of the old guard and responsible for the bank's current condition.
A sudden change could back fire even though the supervisory board's choices had often been unsatisfactory, said a second investor.
"If we kill the supervisory board now, that would further destabilize the bank. That would be a step backwards," he said.
However Achleitner has been recently backed by the Qatari royal family, the second largest investor at Deutsche.
While claiming that he would run for another term if there were an election this year, Achleitner himself has said that no large shareholder had demanded he step down while giving an interview to a magazine last month.
Deutsche bank declined to comment ahead of Thursday's AGM.
Litigations following a series of scandals is one of Deutsche's biggest problems. Bills of 12.6 billion euros ($14.21 billion) have already been nit by the bank as payments for fines and lawsuits since 2012. Just for the charge of manipulation of interbank rates such as Libor, Deutsche has paid more than $3 billion in fines.
There has been am over haul at the bank where the top management was replaced and the settlement of legal action and cutting costs have been fast-tracked by the chief executive, John Cryan, who took on that role less than one year ago.
"We are giving Cryan the benefit of the doubt," said a large investor.
(Source:www.reuters.com)
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