Finally, WestLB has sacked its chief executive Thomas Fischer, along with the chief risk officer Matthijs van den Adel, for there alleged involvement in the stock trading scandal that has rocked the German landesbank.
The supervisory board has decided to dismiss these two board members after it found that his management team didn’t inform about risk positions taken by the bank’s proprietary equities trading business. WestLB confirmed that it would not dismiss any other members of the management board.
The decision has been taken in the bank’s supervisory board meeting, in which the board could not find out whether internal information rules had been violated, but alleged that why board were kept in the dark about compromising share-trading activities.
WestLB traders of stock held by the bank are suspected of manipulating daily closing prices of preference shares in companies including BMW and Volkswagen. By doing so, they inflated the bank’s profits on paper, securing hefty bonuses for themselves. In this scandal, the bank is supposed to face losses of about $343.08 million (€250m), but German press reports claim the real figure could be between $548.93 (€400m) and $648 million (€500m).
Earlier in the April, WestLB had fired two traders for breaching internal risk limits. The propriety desk had lost about $137.23 million (€100m) in botched speculative deals in Volkswagen shares.
The scandal has ruined the reign of Mr. Fischer, who was appointed in 2004 to steer the bank out of a deep financial crisis. After ending the tarnished episode, the bank has confirmed that Alexander Stuhlmann, the former head of HSH Nordbank, will replace Thomas Fischer as the chief executive, but didn’t appoint the chief risk officer yet.
The management crisis had spurred the takeover speculations and LBBW seems to be a frontrunner for the WestLB. However, after sacking the chief executive and chief risk officer, the bank will be looking to improve its tainted image and seeks to regain its customer’s confidence, which perhaps is lost to some extent.
Via: Financial Times
