The US Department of Justice is investigating whether Deutsche Bank AG contravened foreign corruption or money laundering laws in its work for state fund 1Malaysia Development Berhad (1MDB), the Wall Street Journal reported on Wednesday.
The news came after the bank announced plans to scrap its global equities unit, cut some fixed-income operations and slash 18,000 jobs globally in a 7.4 billion euro (US$8.34 billion) restructuring program.
Deutsche Bank’s work for 1MDB included helping to raise US$1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate, the newspaper said, citing unidentified people familiar with the matter.
Prosecutors are mainly looking into the role of Tan Boon-Kee, a colleague of a former Goldman Sachs Group Inc executive, Tim Leissner, who worked with him on 1MDB-related business, the paper said.
She left Goldman to become Asia-Pacific head of banking for financial institutions clients at Deutsche Bank, where she was involved with further 1MDB dealings, it said.
In an e-mailed statement, Deutsche Bank said it had fully cooperated with all regulatory and law enforcement agencies that made inquiries about the fund.
“As stated in asset forfeiture complaints filed by the US Department of Justice, 1MDB made ‘material misrepresentations and omissions to Deutsche Bank officials’ in connection with 1MDB’s transactions with the bank,” it told reporters.
“This is consistent with the bank’s own findings in this matter,” it said.
A civil asset-forfeiture complaint by the department repeatedly describes Deutsche Bank as being misled by 1MDB officers, the Wall Street Journal said.
Tan left Deutsche Bank last year after it discovered communications between her and Jho Low (劉特佐), a Malaysian financier who the department has described as the central player in the 1MDB scandal, the newspaper reported.
A representative of insurance company FWD Group (富衛), Tan’s current employer, said the company and Tan declined to comment.
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