Deutsche Boerse CEO denies insider trading allegations

By Edward Taylor

FRANKFURT (Reuters) - Deutsche Boerse's (DE:DB1Gn) chief executive said insider trading allegations against him would prove unfounded, pointing out that he did not determine the timing of his share purchases ahead of the announcement of merger plans with the London Stock Exchange (L:LSE).

Deutsche Boerse's supervisory board created a unique share purchase plan for CEO Carsten Kengeter that allowed him to invest 4.5 million euros ($4.8 million) in shares in the stock exchange operator at a price of 69 euros apiece in December 2015, he told a news conference on Thursday.

German police and prosecutors this month searched Kengeter's office and apartment as they investigate whether secret merger talks with LSE were already under way at that time.

"When I purchased the shares using my own funds, I did not do so at a time of my own choosing," Kengeter said on Thursday.

"I did so between 1 and 21 December 2015 within a time-frame fixed by the supervisory board," he said, adding that the shares were subject to a holding period until the end of 2019.

He declined to say whether it was already clear in December 2015 that a merger with LSE would be attempted, saying he could not comment on the ongoing investigation.

"Insider trading is against my innermost conviction," he said, adding that he and Deutsche Boerse were fully cooperating with the public prosecutor.

Separately, Kengeter said a failure to complete the merger with LSE to create Europe's biggest stock market would weaken Germany's main financial center, Frankfurt.

"Any concerns that Frankfurt as a financial center might be disadvantaged by the proposed business combination fail to recognize one thing: the biggest risk to Frankfurt... is doing nothing," he said.

Deutsche Boerse and LSE are proposing to locate the company headquarters in London, despite calls by regulators in the German state of Hesse to transfer more responsibility to Germany. The Brexit vote has amplified those demands.

Kengeter said that Deutsche Boerse would create an additional 300 jobs in Frankfurt, adding that he was engaged in constructive talks with policymakers in Hesse, Deutsche Boerse's home state, and with antitrust regulators in Brussels.

Regardless of where the a combined holding company will be headquartered, the regulatory laws ensure that Frankfurt retains key responsibilities over the Frankfurt Stock Exchange and Eurex Deutschland, Kengeter said.

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"The two exchanges as well as post trading and the market data business will remain in Frankfurt, even after the merger," Kengeter said. ($1 = 0.9407 euros)