German lawmakers challenge deputy finance minister's Goldman link in bank merger

By John O'Donnell and Arno Schuetze BERLIN/FRANKFURT (Reuters) - German lawmakers on Monday criticised deputy finance minister Joerg Kukies and Goldman Sachs on Monday, alleging a conflict of interest in the U.S.

Reuters March 19, 2019 02:05:25 IST
German lawmakers challenge deputy finance minister's Goldman link in bank merger

German lawmakers challenge deputy finance ministers Goldman link in bank merger

By John O'Donnell and Arno Schuetze

BERLIN/FRANKFURT (Reuters) - German lawmakers on Monday criticised deputy finance minister Joerg Kukies and Goldman Sachs on Monday, alleging a conflict of interest in the U.S. investment bank advising state-backed Commerzbank on a possible merger with Deutsche Bank.

Kukies, who was formerly co-head of Goldman Sachs in Germany, left the Wall Street firm a year ago to become deputy German finance minister.

Kukies has since advocated a merger between Commerzbank and Deutsche Bank, which unions warn could mean up to 30,000 job cuts, people familiar with the matter say.

Goldman Sachs is advising Commerzbank on the $28 billion plus deal deliberations, people familiar with the matter said.

"It's a conflict of interest," Fabio De Masi, a prominent leftist lawmaker in the German parliament, said, pointing to the state's 15 percent stake in Commerzbank.

A spokesman for Kukies told Reuters there was no conflict of interest and that he had worked in the trading department at Goldman Sachs, which was "strictly separated" from bankers who advised on mergers.

Goldman Sachs declined to comment.

"In his 17 years at Goldman Sachs, Joerg Kukies exclusively worked for the sales and trading sector with no responsibility for the advisory/mergers and acquisitions section," the spokesman for Kukies said.

Although confirmation of merger talks between Germany's two largest banks, following months of speculation, has boosted their share prices, it has also triggered opposition and concerns over the impact on employment.

The issue is a highly emotive one in Germany and in its Tuesday edition, top-selling tabloid newspaper Bild raised a question mark over Kukie's future in the government.

"When 30,000 jobs are on the line, the government must avoid the impression of a conflict of interest," De Masi added.

This was echoed by Danyal Bayaz, a German parliamentarian and finance expert from the country’s Green party.

"In the financial crisis, we saw that government and finance were too interconnected. Ten years later, we don't want to have the same. We want a strict separation from politics and industry," Bayaz said.

"It is important to avoid the appearance of conflict of interest," he added.

(Writing by John O'Donnell; Editing by Alexander Smith)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Robinhood now a go-to for young investors and short sellers
Business

Robinhood now a go-to for young investors and short sellers

By John McCrank NEW YORK (Reuters) - Robinhood, the online brokerage used by many retail traders to pile in to heavily shorted stocks like GameStop Corp, has made an ambitious push into loaning out its clients' shares to short sellers as it expands its business. The broker had $1.9 billion in shares loaned out as of Dec. 31, nearly three times the $674 million a year earlier, and it was permitted to lend out $4.6 billion worth of securities under margin agreements, around five times bigger than the prior year, according to an annual regulatory filing late on Monday

Wall Street mixed as Apple and Tesla retreat
Business

Wall Street mixed as Apple and Tesla retreat

By Noel Randewich (Reuters) - Wall Street was mixed on Tuesday, with Apple and Tesla losing ground, while materials and energy companies climbed as investors looked toward the U.S. Congress approving another stimulus package.

Biden's SEC nominee vows review of GameStop trading issues, climate disclosures
Business

Biden's SEC nominee vows review of GameStop trading issues, climate disclosures

By Pete Schroeder and Chris Prentice WASHINGTON (Reuters) - U.S. President Joe Biden's pick to head a key market regulator promised on Tuesday a thorough review of issues raised by the GameStop Corp stock frenzy and suggested companies may have to disclose their potential risks from climate change