Reuters
Published Mar 19, 2019 05:15AM ET
German lawmakers challenge deputy finance minister's Goldman link in bank merger
By John O'Donnell and Arno Schuetze
BERLIN/FRANKFURT (Reuters) - German lawmakers on Monday criticized deputy finance minister Joerg Kukies and Goldman Sachs, alleging a conflict of interest in the U.S. investment bank advising state-backed Commerzbank on a possible merger with Deutsche Bank .
Kukies, who was formerly co-head of Goldman Sachs (N:GS) in Germany, left the Wall Street firm a year ago to become deputy German finance minister.
Kukies has since advocated a merger between Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn), which unions warn could mean up to 30,000 job cuts, people familiar with the matter say.
Goldman Sachs is advising Commerzbank on the $28 billion plus deal deliberations, people familiar with the matter said.
"It's a conflict of interest," Fabio De Masi, a prominent leftist lawmaker in the German parliament, said, pointing to the state's 15 percent stake in Commerzbank.
A spokesman for Kukies told Reuters there was no conflict of interest and that he had worked in the trading department at Goldman Sachs, which was "strictly separated" from bankers who advised on mergers.
Goldman Sachs declined to comment.
"In his 17 years at Goldman Sachs, Joerg Kukies exclusively worked for the sales and trading sector with no responsibility for the advisory/mergers and acquisitions section," the spokesman for Kukies said.
Although confirmation of merger talks between Germany's two largest banks, following months of speculation, has boosted their share prices, it has also triggered opposition and concerns over the impact on employment.
The issue is a highly emotive one in Germany and in its Tuesday edition, top-selling tabloid newspaper Bild raised a question mark over Kukie's future in the government.
"When 30,000 jobs are on the line, the government must avoid the impression of a conflict of interest," De Masi added.
This was echoed by Danyal Bayaz, a German parliamentarian and finance expert from the country’s Green party.
"In the financial crisis, we saw that government and finance were too interconnected. Ten years later, we don't want to have the same. We want a strict separation from politics and industry," Bayaz said.
"It is important to avoid the appearance of conflict of interest," he added.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.