Joachim Faber

Bourse Chairman Feels the Heat

  • Why it matters

    Why it matters

    Deutsche Börse is grappling for a new growth strategy following the collapsae of its merger with the London Stock Exchange in the wake of the Brexit vote.

  • Facts


    • Deutsche Börse’s failed merger with the London Stock Exchange cost it around €76.5 million ($85.4 million).
    • The deal went bust after Brexit. Now it could cost the German stock exchange operator’s chief executive and its supervisory board chairman their jobs.
    • Deutsche Börse CEO Carsten Kengeter is under investigation for alleged insider trading, a charge one shareholder said was “like a bank manager being investigated for counterfeiting money.”
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Kengeter, CEO of Deutsche Boerse attends the initial public offering of Scale at the Frankfurt stock exchange in Frankfurt,
Uneasy times for the two men leading Deutsche Börse. Source: Reuters

When Joachim Faber agreed to start working for Deutsche Börse as its supervisory board chairman back in 2012, he was already nearing retirement. He could have declined, opting instead to devote more time to his passion of rowing after a long career in banking and insurance.

But thanks to Deutsche Börse’s failed bid to merge with the London Stock Exchange – and all the hostility it sowed among shareholders – Mr. Faber now risks ending his career on a low note.

When Mr. Faber, 67, addressed the thousands of Deutsche Börse investors who had gathered for the company’s annual meeting on Wednesday, the hostile silence was deafening.

No one applauded at the beginning of his remarks, nor when he thanked his many employees for their hard work. It was evident that the botched alliance hasn’t just put Deutsche Börse Chief Executive Carsten Kengeter in the firing line, but Mr. Faber as well.

On Wednesday, shareholders peppered Mr. Faber with questions, knowing full well that he is more than just the company’s chief inspector. It was his idea to create one of the world’s largest securities and derivatives market operators by merging with LSE, and he was the one who hired Mr. Kengeter to help him do it.

After that deal went south, Mr. Faber was seen by many shareholders as having secured an overly generous stock option package for Mr. Kengeter, who now faces an insider trading investigation. Two months before news of the planned merger went public, the chief executive acquired a number of shares in his company – shares that quickly rose in value. Now, Mr. Kengeter is being investigated by Frankfurt prosecutors on suspicion of having used his knowledge of the deal to gain a trading advantage. He has denied any wrongdoing.

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