Deutsche Bank suspected of conflict of interest in Postbank IPO
Deutsche Bank may have opened itself up to a possible conflict of interest with its recent plans to buy Postbank while it was also lead-managing the bank’s stock market flotation, the head of the German financial sector watchdog BaFin said Tuesday.
Germany’s biggest bank, which had been asked by the German government to examine the possbility of buying Postbank outright, may have opened itself up to “a conflict of interests as defined by the German stock trading law,” BaFin chief Jochen Sanio said in interview with the financial daily Boersen-Zeitung.
“We’ve never had to rule on a case like this before. We’ve nearly completed our examination of the legal situation,” Sanio said.
Deutsche Bank came under heavy fire for its role in and handling of the initial public offering (IPO) of Postbank last month.
Indeed, tensions between Deutsche Bank and Postbank’s parent, the semi-privatised German postal authority Deutsche Post, were at the root of the problems that plagued Germany’s most important flotation in four years and nearly caused the listing to swerve off course altogether.
Just weeks prior to the listing, it emerged that Deutsche Bank had been approached by the German government to buy Postbank, but then decided against it because the asking price was too high.
And the bank subsequently committed a faux pas by allowing an internal document to be leaked to the press in which it plead for a lower book-building price — a price range used for marketing the issue to investors — than Deutsche Post wanted.
Sanio said the lower valuation of Postbank by Deutsche Bank was not the object of any official inquiry by the financial sector watchdog.
“Before the document was leaked, other banks had also drawn up their own studies offering similar valuations. But even without that, Deutsche Bank’s behaviour cannot legally be seen as price manipulation, because Postbank’s shares were not yet listed,” the BaFin chief said.
