Former UBS banker and current head of Deutsche Börse expected to be cleared on suspicion of insider trading. Now however the calls for the resignation of Carsten Kengeter are growing ever louder.
Last May Carsten Kengeter sounded very confident. He was certain, he told the Deutsche Boerse annual general meeting, that accusations against him of insider trading would prove groundless.
The German finance professional, who once led UBS’s Investment Bank, seemed certain of himself: And at the time saw no reason to renounce his bonus.
No future
Now however he is facing problems. According to Germany’s «Handelsblatt» (article firewalled) the investigations surrounding Kengeter are now paralysing Deutsche Boerse, which is unsettling not only the owners but also politicians.
Senior German politician Thorsten Schaefer-Guembel, of the SPD, has now become the first high-profile political figure to demand Kengeter’s resignation. «Despite all the support on offer, the team at the head of the Boerse has no future», he told the paper. The group must «finally change the head of the board and the supervisory council to help restore trust».
As finews.com has already reported, Kengeter wants to continue at Deutschen Boerse.
Prosecutors will decide this summer
However time is running out for him in defending his position. Kengeter’s employment contract expires in April 2018, and negotiations for an extension have been stalled by the current investigations. In fact a decision from Frankfurt prosecutors is expected this summer.
Given the accusations, the supervisory authority in the regional economics ministry in the state of Hessen is now also examining Kengeter’s suitability for the job, although it is waiting for the prosecutors findings.
A talent for surviving storms
One anonymous member of the supervisory authority told «Handelsblatt»: «In a normal company the managing board would long ago have said: Mr. Kangeter it can’t continue like this, given the accusations in the room».
This doesn’t offer much hope for a rosy future. Still, Kangeter has often through his career displayed a talent for surviving such storms. In 2011 he kept his office after the $2-billion fraud case involving the ex-UBS trader Kweku Adoboli, largely, according to sources, because he had to lead the subsequent clean-up operation himself.
By contrast Oswald Gruebel resigned from his position as head of Switzerland’s biggest bank. Kengeter was also in charge of UBS’s Investment Bank at the time of the manipulation of the Libor interest rate and precious metals prices. None of the affairs touched him.
