DWS boss Wöhrmann has been under public pressure for a long time. Not even 24 hours after the start of a search for “greenwashing” allegations, the parent company Deutsche Bank is now pulling the ripcord.
Deutsche Bank is replacing the boss of its fund subsidiary DWS, which has been targeted by the judiciary.
At the end of the Annual General Meeting on June 9th, the current CEO Asoka Wöhrmann will resign from his post, and Deutsche Bank manager Stefan Hoops will be his successor effective June 10th. This was announced by Germany’s largest financial institution and DWS early Wednesday morning.
Hoops currently heads Deutsche Bank’s corporate bank, which encompasses the institution’s entire corporate and business banking arm. David Lynne, currently head of Deutsche Bank’s corporate bank in Asia/Pacific, is to take on this job in the future.
On Tuesday, around 50 emergency services from the public prosecutor’s office, the financial supervisory authority Bafin and the Federal Criminal Police Office (BKA) examined rooms in the headquarters of Deutsche Bank Frankfurt and in the neighboring building of the Deutsche Bank fund subsidiary DWS until around 6:30 p.m. Reason according to the public prosecutor’s office in Frankfurt: suspicion of capital investment fraud. According to the authority, written documents and data carriers were secured on Wednesday.
Dizziness about sustainability
The asset manager DWS is accused of having sold so-called green financial products as “greener” than they actually are. DWS is said to have overestimated the information on sustainability, but in reality it is not as advanced as stated on issues such as environmental and climate protection – i.e. “greenwashing”. The investigation was initiated by the former sustainability officer at DWS, Desiree Fixler, with public criticism of her former employer last year.
“The procedure is directed against previously unknown employees and managers of DWS,” the public prosecutor announced on Tuesday. According to the authority, the investigation has been ongoing since mid-January 2022.
“After the examination, there were sufficient factual indications that, contrary to the information in the sales prospectuses of DWS funds, ESG factors were actually only taken into account in a minority of the investments, but were not taken into account in a large number of investments,” said the public prosecutor. This raises the allegation of prospectus fraud. ESG stands for “Environment, Social, Governance”, in German: environment, social affairs and good corporate governance.
Violating internal rules
Wöhrmann, who returned to the helm of DWS as Chief Executive Officer (CEO) in 2018, had also come under pressure in the past few months because he did business both via his private email account and via the messenger service Whatsapp is said to have communicated – two channels that violate internal rules.
“The allegations that have been leveled against DWS and myself over the last few months, including personal attacks and threats, however unfounded or unfounded, have left their mark. They were a burden for the company as well as for me and especially for my relatives,” Wöhrmann wrote in a message to the workforce on Wednesday. “It is therefore with a heavy heart that I have agreed with the company to step down as CEO. I want to give both DWS and myself a fresh start.”
Wöhrmann’s designated successor Hoops was most recently head of the corporate bank at Deutsche Bank. The business graduate has worked at Deutsche Bank since 2003, initially in sales for fixed-income securities. In 2008, Hoops switched to credit trading in New York and in the years that followed held various senior positions in the capital markets business in the USA and Germany. Hoops has headed the corporate bank since July 2019.
Deutsche Bank boss Christian Sewing emphasized that asset management is and will remain an important part of the group’s business model: “We are convinced that DWS will continue its success story under the leadership of Stefan Hoops.”