FRANKFURT (Reuters) -The chief executive of Deutsche Bank (ETR:DBKGn) asset manager DWS will step down next week, he said on Wednesday, a day after raids by prosecutors over allegations that the company misled investors about “green” investments.
The business has been dogged by the accusations for months, prompting German prosecutors to conduct raids on DWS and the headquarters of Deutsche Bank on Tuesday.
German officials have been investigating reports and a whistleblower’s allegations that DWS had exaggerated the green credentials of investments it sold – a practice known as greenwashing. DWS has repeatedly denied that it misled investors.
The outgoing CEO, Asoka Woehrmann, told employees in a memo that it was a joy to see DWS flourish but that “allegations…, however unfounded or undefendable, have left a mark”.
“To quote Charles Dickens: it was the best of times, it was the worst of times,” he said in the memo, which was seen by Reuters.
On Tuesday German prosecutors said that “sufficient factual evidence has emerged” to show that environmental, social and governance (ESG) factors were taken into account in a minority of investments “but were not taken into account at all in a large number of investments”, contrary to statements in DWS fund sales prospectuses.
The U.S. Securities and Exchange Commission and German financial watchdog BaFin last year launched separate investigations into the whistleblower’s allegations. The whistleblower, a former head of sustainability at DWS, had said that the company overstated how it used sustainable investing criteria to manage investments.
Shares in DWS have slumped 20% since the SEC and BaFin investigations were made public in August last year.
DWS and Deutsche Bank on Tuesday said that the asset manager had cooperated with regulators and authorities in the past and would continue to do so.
Stefan Hoops, who has been overseeing Deutsche Bank’s corporate banking division since 2019, will replace Woehrmann from June 10, the bank said.
Woehrmann’s resignation takes effect on June 9, the day of its annual general meeting.