German authorities are investigating allegations that some of the top managers of the troubled IKB Deutsche Industriebank AG were involved in insider trading, according to media reports on Saturday.
The biggest shareholder of the bank, the state-owned KfW development bank, said last week that it had formed a banking pool with other lenders to protect IKB after it was battered by the US subprime lending crisis.
According to a report in Focus magazine, Duesseldorf prosecutors are now looking into whether two former board members, an executive committee member, and three other bankers were involved in insider trading at the bank.
According to the magazine, the bank's worth has sunk from 2.9 billion euros (US$4.28 billion) at the start of the year to some 700 million euros today.
suspicion
"There is the suspicion that there was possible insider trading," prosecutor Arno Neukirchen was quoted by the magazine as saying.
Neither Neukirchen nor other prosecutors in Duesseldorf were available Saturday for comment.
As part of the investigation, 10 private homes were searched on Wednesday, Focus reported.
The regional newspaper Rheinische Post, citing sources in the prosecutor's office, reported that some of the residences belonged to four former board members and a currently active manager at the bank.
IKB's problems sprang from its Rhineland Funding investment vehicle's apparent inability to cover its funding needs because of exposure to US subprime real estate loans, made to borrowers with weak credit histories.
risk shield
In the past week, KfW said it had raised its risk shield for IKB by 2.3 billion euros to 4.8 billion euros on the basis of new information regarding the valuation of risks covered by Rhineland Funding and because of a "dramatic worsening" of markets' assessment of default risks in the subprime segment.
Later, it said it and a pool of other lenders had stepped in to cover additional risks estimated at US$520 million.
KfW spokesman Michael Helbig said on Thursday that the banking pool agreed IKB should be sold. He said work would continue on a concept for the sale process, but would not elaborate.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
RSS