Deutsche Bank (XE:DBK)
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2 Months : From Oct 2019 to Dec 2019
By Jenny Strasburg
Deutsche Bank AG officials approved the sale of a chunk of Silicon Valley real estate to a Russian businessman despite objections from its U.S. reputational risk committee, according to documents and people familiar with the matter.
The lender's Germany-based global reputational risk committee approved the $72 million deal in May 2018, overruling concerns raised by executives including the one responsible for Deutsche Bank's U.S. anti-money-laundering controls, the people said. He has since left the bank.
The transaction, which was championed by its real-estate team, occurred at a time when Deutsche was under scrutiny by members of Congress over its Russian business relationships.
Deutsche Bank continues to hand over documents to Congress in a probe of money-laundering controls and longtime links with Russian companies and oligarchs. A U.S. Justice Department investigation into aspects of those Russia relationships and the bank's handling of internal red flags is ongoing, according to people close to the bank and its interactions with investigators.
Spokesmen for Deutsche Bank and its asset-management arm, DWS, said the business was acting as a fiduciary for fund investors. They said the deal went through the bank's processes to prevent money laundering and other financial crimes by clients. The deal didn't involve financing from Deutsche Bank, they said.
"Consistent with our policies and procedures extensive due diligence was conducted on this transaction and involved, among others, the [anti-financial crime] unit of Deutsche Bank. Additionally, the transaction was made subject to the reputational risk assessment procedures in place at that time," a spokesman for DWS said.
The bank identified no evidence the deal "would violate money laundering or sanctions laws. As a result, the discussion of whether to move forward with the transaction was focused on reputational considerations, " a spokesman for Deutsche Bank said.
"There are processes in place that govern reputational risk considerations, and regional and global judgments about these considerations can differ, as occurred in this instance," the Deutsche Bank spokesman said.
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(END) Dow Jones Newswires
October 31, 2019 12:04 ET (16:04 GMT)
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