No all-clear for the head of the fund subsidiary DWS

Frankfurt If you look at the numbers alone, 2021 was a very successful year for Asoka Wöhrmann, head of the Deutsche Bank fund subsidiary DWS. According to the annual report published on Friday, the manager is entitled to 6.9 million euros in salary and bonus, which is around 15 percent more than for 2020. At first glance, this looks like a vote of confidence.

But after various attacks, Wöhrmann’s job is still in danger, and the crisis of the past few weeks is not yet over. The figures may be correct, but otherwise many things are in question, and the man at the top is directly or indirectly responsible for the deep uncertainty.

According to several insiders, Wörmann can still rely on the backing of Deutsche Bank boss Christian Sewing and DWS supervisory board chairman Karl von Rohr. Even within the fund subsidiary, many are now assuming “that Wöhrmann will somehow make it through”, as one manager puts it. Also because he “is good for the company overall and has made DWS stronger”.

But it is also a fact that the list of allegations against Wöhrmann has reached a considerable length. Alleged greenwashing, dubious deals, dubious business contacts, the suspicion of using private e-mail and WhatsApp accounts for professional purposes – the examination of all these points by the bank is likely to take some time.

Top jobs of the day

Find the best jobs now and
be notified by email.

According to several people familiar with the case, new valid suspicions would currently be the greatest danger for Wöhrmann. Then his career at DWS could quickly be over, as his supporters also concede.

Deutsche Bank boss has “no doubts”

At the annual press conference at the end of January, Deutsche Bank boss Sewing praised Wöhrmann’s “outstanding work” and added: “I have no doubts.” According to insiders, nothing has changed to this day. That sounds like clear support, but in fact the bank faces a dilemma.

On the one hand, Wöhrmann delivers good figures. For 2021 he presented a record profit of 1.1 billion euros – a good 40 percent more than in the previous year. And Sewing needs every penny of it to meet its cleanup goals. Wöhrmann kept costs down and did not shy away from making uncomfortable decisions. Managers had to go, others lost their titles.

But there are also weighty arguments on the other side of the scales. “All the affairs are damaging the DWS brand, and sooner or later that will be reflected in the numbers,” says a Deutschbanker. Another insider stated that Wöhrmann was ailing. The DWS boss “tends to overestimate himself,” says someone who has known him for a long time. He had hoped to be able to simply wipe away the problems with his charisma and his powers of persuasion – in vain.

In addition, Deutsche Bank is still having trouble with its compliance. Last May, the money house therefore caught a rebuke from the powerful US Federal Reserve. “Actually, the bank cannot afford any compromises on this issue,” says a manager at the institute. Above all, legal director Stefan Simon has to prove that he takes action, regardless of people.

After all, the bank in the USA still has a so-called deferred prosecution Agreement (DPA). With this, companies that have come into conflict with the US authorities declare their willingness to refrain from further misconduct and to report possible compliance problems immediately to the supervisors. In return, no charges will be filed. Violating a DPA can result in severe penalties.

As can now be seen from Deutsche Bank’s annual report published on Friday, the US Department of Justice complains that the money house informed it too late about the greenwashing allegations against DWS. The institute had thus violated reporting obligations. At the end of February, it was agreed with the US Department of Justice that the existing monitoring by an independent controller should be extended until February 2023.

The affairs are also causing unrest within DWS. Some complain that the innermost circle around Wöhrmann has a tight-knit mentality. “The momentum from the economic success has been noticeably dampened as a result,” says someone who has known him for a long time. Another confirms that Wöhrmann is hiding away, only trusting his close circle.

The DWS boss himself speaks of a targeted campaign. The attacks had the “sole goal of harming us. I will not be intimidated and prevented from doing my job,” he said at the presentation of the annual figures a few weeks ago. But that has become increasingly difficult in recent months.

Trouble with the ex-head of sustainability

The problems began last August when Desiree Fixler, the head of sustainability who was fired by Woehrmann, accused DWS of systematically exaggerating the issue of green and socially responsible finance and thereby deceiving the shareholders. DWS has repeatedly denied the allegations. But: The US Securities and Exchange Commission (SEC) has been examining the case for months, as have the US Department of Justice and the German financial regulator Bafin. When presenting the annual figures, Deutsche Bank boss Sewing emphasized that so far there had been no evidence that DWS had systematically embellished its commitment to sustainability.

Insiders assume, however, that the fund subsidiary will not get away with punishment in the USA. It is very unlikely that the US authorities, after months of testing, will come to the conclusion that everything is fine. Especially since the investigation is one of the first high-profile cases for the SEC’s newly established sustainability task force. A first lawsuit that Fixler had filed against the fund company with the Frankfurt Labor Court because of her dismissal was dismissed. According to information from the Handelsblatt, Fixler does not want to appeal.

>> Read here: More bonuses at Deutsche Bank – but fewer income millionaires

Wöhrmann’s connection with the obscure Frankfurt businessman Daniel Wruck brought additional trouble. The question is whether the DWS boss has mixed private and professional interests. That would be a breach of the bank’s code of conduct.

Wruck helped bring the bank and insurer Allianz on board as co-investors in a financial arm of online used car retailer Auto1. On the Deutsche Bank side, Wöhrmann was entrusted with driving the project forward.

According to Handelsblatt information, the first contact between Wruck, Deutsche Bank and Auto1 did not come about through the current DWS boss, but through the then investment banking boss Marcus Schenck. Wruck, who has known Schenck for a long time, introduced Hakan Koc to this Auto1 boss, said a person familiar with the matter.

First of all, it is about transactions that fall under the responsibility of the investment bank. Only later, when it became clear that it was a joint venture for used car financing and thus private customer business, did Wöhrmann, the then head of private customers, come into play.

The joint venture between Auto1, Deutsche Bank, Allianz and the controversial businessman Bensen Safaa, who holds the majority in the fintech offshoot, is a failure. And became a problem for Wöhrmann. Because in two cases the manager may not have drawn the line between private and business clearly enough. During the time that Wöhrmann takes care of Auto1, Wruck is also busy with a private favor for Wöhrmann: the Deutsche Bank private customer manager transferred 160,000 euros to the businessman, reference: “DW vehicle”. This means Wruck’s purchase of a Porsche Panamera.

Wruck was supposed to procure the sports car for Wöhrmann at the same “hammer price” that the car dealer himself had given him. The planned purchase is dragging on, as shown by e-mails that the Handelsblatt was able to see. In the end, Wöhrmann will buy a used Porsche for 139,000 euros from Wruck’s dealer and transfer the purchase price from his account. A few weeks later, Wruck transferred the unused 160,000 euros back to Wöhrmann.

The bank has already thoroughly investigated the unsuccessful purchase of Porsche in the past, apparently without any dramatic consequences for Wöhrmann. It could be more explosive for the manager that in the course of the Auto1 negotiations some business e-mails ended up on his private GMX account – and Wöhrmann also sent some e-mails from there that could have a business connection in the broadest sense. Private e-mail accounts are taboo for business-related e-mails for Deutschbankers. The bank is now examining whether and to what extent Wöhrmann violated the bank’s strict code of conduct.

Compliance issues

Since the bank has repeatedly had problems in the past with monitoring compliance with its own rules, the supervisor also takes a close look at the process. The same applies to allegations that Wöhrmann and other DWS executives are said to have exchanged internal business information via the WhatsApp messenger service.

“If the bank sanctions Wöhrmann severely because of these allegations or even urges him to resign, it will open Pandora’s box,” says an insider.

In fact, the money house is currently systematically investigating how employees and managers use WhatsApp and other messenger services – and whether this corresponds to the rules of the supervisors in Europe and the USA. In the meantime, it has also become known that other top managers at Deutsche Bank were in contact with Wruck, from CEO Sewing to Supervisory Board Chairman Paul Achleitner.

Does all this make Wöhrmann’s job safer? In an interview with the Handelsblatt in 2019, he announced his conversion program for DWS with the words: “The stairs will be swept from above.” Now he has to be careful not to get caught by the broom himself. Or that his employer does not collect part of his bonus for the past year – as a less severe punishment for possible rule violations. A variant that some at Deutsche Bank consider the more likely.

More: Deutsche Bank wants to distribute eight billion euros to shareholders by 2025

source site-16