Board Showdown

High Noon at Deutsche Bank

Deutsche Bank Hauptversammlung
Deutsche Bank's annual shareholders' meeting on May 19 could see a nasty board fight spill out into the open over the future of its chairman, Paul Achleitner. Here, a scene from the bank's 2015 shareholders' meeting.
  • Why it matters

    Why it matters

    • The feud at Deutsche Bank threatens to weigh down Germany’s largest financial institution at a time when it is trying to rebound from a string of scandals, including an interest-rate manipulation scheme that cost the bank dearly.
  • Facts


    • In 2015, U.S. and British regulators fined Deutsche Bank $2.5 billion for the involvement of some employees in a global fraud to fix interest rates benchmarks and generate illegal profits. The regulators fined the bank because they said it tried to impede their investigations.
    • Supervisory board member Georg Thoma is investigating whether top managers at Deutsche Bank, including chairman Paul Achleitner, played a role in how the bank dealt with regulators at the time.
    • Some other members of the bank’s supervisory board have attacked Mr. Thoma for what they view as an over-the-top approach to probing misconduct at the bank.
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The first quarter of the financial year is usually a good time for big banks like Deutsche Bank, but analysts fear this year investors could be in for more bad news.

On Thursday, shareholders are hoping that the release of results for the three months through March will signal better times. Germany’s largest bank is reeling from a legacy of problems – the most pressing being the political fallout of a costly manipulation of interest rate benchmarks by some of its employees from 2006 to 2010.

An internal investigation is probing the role played by supervisory board chairman Paul Achleitner in the bank’s cooperation – or lack of it – with U.K. and U.S. regulators that investigated the rate manipulation scandal. The regulators eventually fined Deutsche Bank a combined $2.5 billion for its role in the global collusion, and criticized the bank for trying to impede their probes.

Mr. Achleitner, a former Goldman Sachs Germany director, vehemently denied any attempt to hinder the investigation earlier this month in an interview with Handelsblatt sister publication WirtschaftsWoche.

But the matter hasn’t ended there.


The Libor Scandal-Deutsche Bank


That’s largely because of Georg Thoma, a Deutsche Bank supervisory board member who leads an “integrity” committee trying to get to the bottom of the scandal. Mr. Thoma, a Frankfurt mergers-and-acquisitions lawyer with a reputation for tenacity and propriety, has been aggressively investigating the matter – too aggressively, apparently for some members of Deutsche Bank’s supervisory board.

Mr. Thoma’s efforts to clarify what role Mr. Achleitner played in a strategy to mislead or hinder the regulators has turned into political dynamite, and divided the bank’s top policy-setting panel at a time when investors are already unhappy with its lackluster restructuring and inconsistent performance.

Some members of the supervisory board, in internal emails and memos seen by Handelsblatt, are accusing Mr. Thoma of overreaching and taking his inquiry into the bank’s misdeeds – and into Mr. Achleitner’s role – too far.

The issue threatens to boil over today, when the supervisory board’s executive committee will meet to discuss an potentially explosive dispute that could turn public at the bank’s May 19 annual shareholders’ meeting.

Mr. Thoma was appointed to Deutsche Bank’s supervisory board in 2013 to head the internal investigation into the rate-manipulation scandal, which involved traders at Deutsche Bank, Barclays, Royal Bank of Scotland, Societe Generale and Citigroup, among others.

The traders were caught colluding – through emails and instant messaging – to artificially set the London Interbank Offered Rate and Euro Interbank Offered Rates, which make up two of the most widely used benchmarks that commercial banks use, to set their own lending and interest rates for a range of transactions.

Most of the traders directly involved in the fraud have been prosecuted or left their posts.

Mr. Thoma's efforts to clarify what role if any Mr. Achleitner played in a strategy to mislead or hinder U.S. and U.K. regulators are political dynamite, and have divided the bank's top policy-setting panel at a time when investors are already unhappy with its lackluster restructuring and inconsistent performance.

Today’s meeting of the supervisory board’s executive committee, which is chaired by Mr. Achleitner, comes a day before Deutsche Bank’s integrity committee, chaired by Mr. Thoma, is to meet. Shareholders are bracing for a showdown between Mr. Thoma and his detractors.

One of his biggest critics is Alfred Herling, the deputy chairman of the bank’s supervisory board and the board’s senior-most labor representative, who has accused Mr. Thoma of being overzealous in his pursuit of the truth. In Germany, most corporate supervisory boards are required to have labor representatives on the panel.

Although labor representatives alone never command the majority on the panels, which hire and fire the chief executive and set major policy, they can routinely form alliances with management on key issues. Deutsche Bank is in the midst of a wide-ranging restructuring that could lead to thousands of job cuts.

Investors have criticized the bank’s restructuring plans so far, calling them too timid and calling for more cuts and exits from individual businesses, which could mean more jobs lost and greater labor unrest at Germany’s largest bank. Mr. Achleitner has resisted calls from shareholders for greater cuts, saying the plans put in place by designated chief executive John Cryan need time to bear fruit.

Mr. Cryan, a British banker, also has a unique position in the dispute. Before he was appointed as co-chief executive last year, he was a member of Deutsche Bank’s own supervisory board – since 2013, arriving roughly at the same time on the panel as Mr. Thoma.

Sources tell Handelsblatt that Mr. Herling, the vice chairman, will also be joined at the integrity committee meeting tomorrow by Henning Kagermann, former chief executive of German software giant SAP and a member of the bank’s presidium, who has also been critical of Mr. Thoma.


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Mr. Thoma was reportedly surprised by his colleagues’ attacks, telling friends he was “stunned.” He has stressed the board’s legal obligation to get to the bottom of Deutsche Bank’s misconduct – and apparently sees himself as a target of an old guard nostalgic for the days of looser oversight.

Meanwhile, the wrangling on Deutsche Bank’s supervisory board has put its leader, Mr. Achleitner, in a tough position. Mr. Achleitner was responsible for bringing Mr. Thoma to the bank, and sources say he has been a solid supporter of the integrity committee chief’s push for clarity.

At the same time, Mr. Achleitner is finding himself increasingly under pressure because of those investigations.

As for Mr. Thoma’s future at Deutsche Bank, the disputes with fellow board members could force him to step aside. Yet even if his opponents oust him from the board’s integrity committee, Mr. Thoma will still keep his spot on the board – and remain there unless a court finds “significant cause” to remove him.

Klaus Nieding, a lawyer who represents small shareholders, said jettisoning Mr. Thoma would be a messy move that should be avoided at all costs. Any squabbling, he said, should happen behind closed doors.

Mr. Thoma was reportedly surprised by his colleagues’ attacks, telling friends he was 'stunned.' He has stressed the board’s legal obligation to get to the bottom of Deutsche Bank’s misconduct – and apparently sees himself as a target of an old guard nostalgic for the days of looser oversight.

And while Mr. Kagermann has said it’s time for the bank to turn the page on its scandal-ridden past and look toward the future, many of the bank’s top investors see the situation differently.

“The scandals can’t be investigated thoroughly enough,” said Ingo Speich, a portfolio manager at Union Investment, adding that the people leading those probes should be independent inspectors who are free to pursue the truth wherever it takes them.


Thoma Deutsche Bank PR
Georg Thoma, a Frankfurt M&A lawyer, is the Deutsche Bank supervisory board member leading the investigation into the bank’s handling of a global interest-rate manipulation scandal. He is being attacked by some board members for being overzealous in probing the role played by the bank’s chairman, Paul Achleitner. Source: Deutsche Bank


Mr. Speich said the fight – and an ouster of Mr. Thoma – would feed investor doubts about Deutsche Bank’s willingness to come to terms with its past. The bank’s shares have lost about half of their value since last April, and were trading at €16.66 per share in Frankfurt at 10 a.m.

Mr. Nieding questioned the credibility of a supervisory board that is unable to agree on the appropriate level of oversight.

Unease over the rare public dispute has spread to the bank’s top executives. “In my view, they can fight it out quietly amongst themselves – but please, not in public,” said one high-ranking manager, who declined to be named.

There are no quick and easy answers for Deutsche Bank as it gears up for its shareholders meeting. If the investigation isn’t closed by then, Mr. Achleitner could find himself under fire, with at least one investor questioning whether the supervisory board leader should be barred from leading the proceedings altogether.

Mr. Thoma’s fate will also be a topic for investors.

“We will ask about the concrete allegations against Mr. Thoma, the costs of his investigations and whether he tapped former colleagues or business partners to take part in the probe,” Mr. Nieding said.


Laura de la Motte covers banks and finance for Handelsblatt in Frankfurt. Michael Maisch is deputy editor of the finance section of Handelsblatt. Daniel Schäfer is Handelsblatt’s chief finance editor. Kevin O’Brien is editor-in-chief of Handelsblatt Global Edition. To contact the authors:,,

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