Jürg Zeltner will give up his seat at the supervisory board of Deutsche Bank AG as regulators are expected to block his appointment due to a conflict of interest, Handelsblatt reported Oct. 10, citing insiders.
Zeltner is a group CEO and a co-investor of Luxembourg-based KBL European Private Bankers SA, which is backed by two Qatar-based funds also holding a stake at Deutsche Bank. The German group nominated Zeltner on August 15 to represent the Qatari shareholder on its board. It said at the time that Zeltner will be "deemed a non-independent member of the supervisory board in accordance with the German Corporate Governance Code." Deutsche Bank also submitted an application with the Frankfurt Local Court on the same date.
However, it did not ask Germany's bank supervisory authority to approve the nomination. Such a request is not a requirement for board nominees, but regulators can ask for the removal of a board member if they have a concern over conflicts of interest, according to Handelsblatt. To nominate Zeltner without checking with the regulators first to make sure they would not oppose an appointment was a premature step, sources told the newspaper.
In Zeltner's case, both the European Central Bank and German financial supervisor BaFin have been said to have reservations because it is not convinced Zeltner can be completely impartial given his double roles at KBL and Deutsche, the Financial Times reported Oct. 9.
In light of the regulatory pushback, Zeltner is now expected to leave, a source familiar with the matter told Handelsblatt.
The group will have to seek the approval of its Qatari shareholders before appointing somebody else, the newspaper added.
