Difficult January for Deutsche Bank

LOSSES & LAWSUITS

In the middle of the month, the bank's dismissal of derivatives trader Anshul Rustagi was the lead story in the European edition of the Financial Times newspaper. Rustagi was accused by the firm of allegedly overstating his trading position by almost £30 million, and dismissed for gross misconduct after a disciplinary hearing. Rustagi traded synthetic collateralised debt obligations and other complex forms of credit derivatives.

And at the end of the month, the bank was forced to quit its role as joint corporate broker for BOC Group, because of concerns about a conflict of interest over its role as adviser to Linde, the German conglomerate. According to press accounts, the German bank's pair of roles set tongues wagging in the City when Linde made a £7.6 billion bid for the UK-based gas company BOC days earlier. Compounding the situation is the fact that Deutsche owns 10% of Linde and the bank's chief executive sits on Linde's board.

Also at the end of the month a German court ruled that the chairman of the bank's supervisory board, Rolf Breuer, was wrong to question the creditworthiness of Leo Kirch's PrintBeteiligungs unit in 2002 in an interview with Bloomberg television. The comments precipitated the collapse of the firm, which was Germany's biggest bankruptcy since World War II.

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