A mock trial is a simulated proceeding aimed at corresponding as closely as possible to the real thing, including mock defendants and defense attorneys. Sources say Germany’s Deutsche Bank took a similar dry run with its attorneys as it prepared for a lengthy legal battle with the late media mogul Leo Kirch, who sued the bank for pushing his debt-laden Kirch Group into bankruptcy in 2002.
Deutsche Bank apparently used the mock trials to test out the wording of statements its managers made during the legal proceedings, according to the sources familiar with the case. The question now is: Was this just typical preparation for an important court hearing? Or was it an effort to avoid payment to Mr. Kirch’s heirs?
This question goes to the heart of the latest phase in this long-running saga. Prosecutors in Munich over the summer indicted five current and former managers of Deutsche Bank for fraud, essentially accusing them of obstructing justice through their testimony in the earlier civil case. A judge could decide by the end of the year whether to send the case to a full trial.
The question now is: Was this just typical preparation for an important court hearing? Or was it an effort to avoid payment to Mr. Kirch’s heirs?
What is certain is that one of the most spectacular trials in the history of Germany’s financial sector soon will unfold atop a mountain of evidence. Aside from the 110-page indictment and the 516 pages of investigative findings, insiders say defense attorneys representing Jürgen Fitschen, the current co-chief executive officer of Deutsche Bank, and lawyers for the other four defendants have a number of DVDs full of scanned-in evidence.
The case goes back to 2002. Mr. Kirch blamed the bank and its then chairman, Rolf-Ernst Breuer, for breaching its fiduciary responsibilities when Mr. Breuer questioned the credit worthiness of the media company during a television interview. Both the bank and Mr. Breuer denied any wrongdoing. Heirs of Mr. Kirch sought substantial financial compensation. Prosecutors have now charged Mr. Breuer with lying to judges in previous legal testimony.
In addition to Mr. Fitschen and Mr. Breuer, the defendants include former Deutsche Bank chief executive officer Josef Ackermann, former supervisory board chairman Clemens Börsig and former management board member Tessen von Heydebreck. Sources say Mr. Börsig and Mr. von Heydebreck are also charged with intentionally making false statements. The other Deutsche Bank managers are being spared this charge because, in acting as representatives of the bank in the trial, they cannot be held directly accountable. Deutsche Bank itself is also a co-defendant because any legal action against management board members automatically implicates the company. If a lack of proper supervision by the board is successfully argued, a fine can be imposed.
Normally, defendants have six weeks to make their statements to the court, but experts say the complexity of the indictment likely will mean a time extension. Deutsche Bank had no comment on the pending legal action, but in earlier statements the bank has said any suspicions directed at Mr. Fitschen “will prove to be unfounded.” Though he is accused of attempting to mislead investigators, sources said the charge specifically does not have an addendum of “a particularly serious case.” Rather, the charge is that he did not confront the false statements made by others.
Obstruction of justice and making false statements while not under oath are punishable by up to 10 years in prison in serious cases in Germany. In less serious cases, defendants may be asked to pay a fine.
In previous hearings, Mr. Fitschen repeatedly asked whether he was really responsible for telling his attorneys that their understanding of such a complicated case was wrong. He said he saw no opportunity or reason to correct the statements made. Mr. Fitschen was backed by expert briefs from the law firm Linklaters and by Eberhard Stilz, the retired president of the higher regional court in Stuttgart. Both reached the conclusion that Mr. Fitschen was not obligated to correct any possible false statements of former colleagues in court.
The 12-year civil court battle between Mr. Kirch’s heirs and Deutsche Bank finally ended earlier in 2014 with an out-of-court settlement of over €925 million ($1,198.37 million). Mr. Kirch had argued the bank wanted to cash in by breaking up his company and thus spoke publicly about his company’s financial woes.
Obstruction of justice and making false statements while not under oath are punishable by up to 10 years in prison in serious cases, according to the German penal code, though in less serious cases, defendants may be asked to simply pay a fine. Even just attempting to obstruct justice is punishable, but legal experts said these kinds of charges are difficult to prove. The case is expected to stretch over many months before a decision is reached.
“It is conceivable that the court won’t come to a decision until the end of the year as to whether there will be an opening of main proceedings and, thus, a main trial,” said legal professor Bernd Schünemann.
It has been said that Mr. Fitschen did not participate in the mock trial because he lacked the time. That may well have been a lucky break for him.
Peter Köhler is a financial correspondent for Handelsblatt. Kerstin Leitel is a Handelsblatt editor based in Munich who specializes in banks. Contact the authors: firstname.lastname@example.org and email@example.com