Deutsche Bank co-Chief Executive Jürgen Fitschen and four other former board members, including ex-chief executives Josef Ackermann and Rolf Breuer, were acquitted Monday of collusion in a case stemming from the 2002 bankruptcy of an entertainment firm, Kirch Media.
The acquittal by a court in Munich was expected after the judge, Peter Noll, said earlier this month he believed that prosecutors had failed to prove that the bankers had conspired to lie in a previous civil trial about their alleged involvement in Kirch Media’s bankruptcy.
“The alleged crimes have not been confirmed,” said Mr. Noll, adding that in light of the accusations it was justified that the investigations and court case had taken place.
Before the judge made his ruling, Mr. Ackermann, credited with building Deutsche Bank’s investment banking arm, said in court prosecutors had pursued an “incorrect view, led by insinuations and speculations.”
In 2002, Mr. Breuer, then Deutsche Bank's CEO, cast doubt on the creditworthiness of Kirch Media group, Shortly after, the company went bankrupt.
The acquittal is a small relief for Germany’s biggest bank, which has suffered amid inconsistent earnings and high legal costs in the aftermath of the global financial crisis, often brought on by misdeeds at its investment banking arm.
The bank’s shares extended their losses after the ruling, and were down 3.2 percent at €16.25 by 11.25 a.m. in Frankfurt.
The bank’s shares have plunged 40 percent in the past six months and are foundering ahead of its May annual shareholders meeting, where top managers are on the defensive amid signs of a growing shareholder uprising. Co-CEO Anshu Jain resigned last June and John Cryan, a British banker from UBS, will take over as sole chief executive when Mr. Fitschen resigns next month.
In January, the bank shocked shareholders with a record 2015 loss of €6.8 billion, the largest in Deutsche Bank’s 146-year history. The bank paid $2.5 billion in U.S. and British fines to settle an investigation into interest rate manipulation.
For Germany’s prosecutors, the acquittal is the second setback within two months’ time. Last month, a Stuttgart court cleared former Porsche Chief Executive Wendelin Wiedeking and his former chief financial officer, Holger Härter, from manipulating VW’s share price during a failed takeover attempt.
Mr. Fitschen and his former colleagues, aged 67 to 78, were accused of deceiving a court examining Deutsche Bank’s role in bankruptcy of Kirch Media, a Deutsche Bank client that had built a German entertainment empire around a pay-cable TV business and sports licensing. The firm was forced to file for bankruptcy in 2002 with €6.5 billion, or $7.3 billion in debts.
In an interview shortly before the bankruptcy filing, Mr. Breuer, then Deutsche Bank’s CEO, cast doubt on the creditworthiness of the Kirch group, which at the time owned television broadcaster ProSiebenSat.1. Shortly after the interview, Kirch Media filed for bankruptcy and Leo Kirch, its founder, sued Deutsche Bank, alleging the bank intentionally drove his company into insolvency.
The bank, through its lawyers, has consistently denied that Mr. Breuer and the other bankers intended to drive Kirch Media into bankruptcy. Deutsche Bank in 2014 agreed to pay Mr. Kirch’s heirs €925 million, or $1 billion, to settle the civil trial, without admitting guilt.
Deutsche Bank, in an effort to recoup some of those costs, reached an agreement earlier this year with Mr. Breuer under which he would pay the bank €3.2 million, or $3.6 million.
Prosecutors in Munich had brought criminal charges against the bankers following the settlement, alleging that they had conspired among themselves to hide their complicity in the Kirch bankruptcy during the civil trial.
The prosecutors office had not yet decided whether it would appeal Monday’s ruling at Germany’s highest court, the Federal Court of Justice in Karlsruhe, a spokesman said.
Kerstin Leitel covers banks and insurance companies for Handelsblatt. Gilbert Kreijger, an editor with Handelsblatt Global Edition in Berlin, contributed to this article. To contact the author: email@example.com