Deutsche Bank Contacted by Regulator Over Von Rohr’s Role at DWS
(Bloomberg) -- German regulators are seeking more information about the role of Deutsche Bank AG President Karl von Rohr as part of a broader probe into the lender’s asset management business after claims of greenwashing, according to people familiar with the process.
Financial markets regulator BaFin, has contacted the lender to learn about Von Rohr’s role as chairman of DWS Group’s supervisory board, the people said, asking not to be identified discussing private information. In that position, he received complaints from the firm’s now fired sustainability head, helped arrange an audit into her dismissal that found DWS did nothing wrong, and signed off on the annual report now being investigated for alleged inflated ESG claims.
Regulators are now looking at the very highest levels of Deutsche Bank. BaFin and U.S. authorities including the Securities and Exchange Commission started probing DWS after the former sustainability head, Desiree Fixler, accused it of exaggerating its commitment to environmental, social and governance investing. DWS says the claims are “unfounded.”
Von Rohr didn’t respond to a LinkedIn message seeking comment. Representatives for DWS, Bafin and Deutsche Bank declined to comment.
The DWS investigations have forced the asset management industry to sit up and take note as greenwashing -- a term given to inflated or misleading ESG statements -- draws an increasingly aggressive response from regulators. News of the DWS probe has led investment firms across Europe to review their portfolios to ensure they’re not vulnerable to similar probes, according to people familiar with the matter.
DWS’s share price has yet to recover from the selloff that hit once the market learned of the probes. Fixler, whom DWS fired just before publishing the annual results, says she had tried to alert management to what she says were misleading ESG figures. Her whistleblower testimony is informing both the SEC and BaFin investigations.
Von Rohr and the chairwoman of DWS’s audit committee, Ute Wolf, asked another supervisory board member, Richard Morris, to assess Fixler’s allegations after she sent an email outlining them to von Rohr shortly after she was dismissed in March, the people said. Morris then mandated the audit firm PwC as an external party, which later cleared DWS of wrongdoing.
“We could not identify substance within the allegations made by Ms Fixler, namely greenwashing, misleading investors or harassment during Ms Fixler’s onboarding,” the authors of the audit wrote in their executive summary, parts of which were seen by Bloomberg.
However, the authors also noted that they couldn’t review all of Fixler’s emails as “data extraction” was ongoing when they submitted the report. They also said their work was “limited to the analysis described in the report and was based only on the information made available through DWS” or in the public domain. The PwC auditors said that “changes in circumstances” after this date could affect the findings.
The auditors later completed extraction of Fixler’s emails and the retrieved data didn’t change the outcome of the analysis, a person familiar with the matter said.
Fixler’s allegations along with the regulatory probes represent a serious setback for DWS Chief Executive Officer Asoka Woehrmann and his boss, Deutsche Bank CEO Christian Sewing. Both have been keen to tout their firms’ ESG credentials as a way to win business in what’s become a highly lucrative market. Both executives have also repeatedly declared their commitment to ESG at conferences, investor events and in interviews.
Woehrmann had his contract as DWS CEO renewed in late March, after the annual report was published.
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