Deutsche Bank and Gifts for China’s Mighty

For years to succeed in China, Deutsche Bank relied on a questionable system of gifts, favors and cash payments. This is shown by internal documents that WDR, SZ and “New York Times” were able to evaluate.

The confidential documents fill many pages: attorney’s opinions, e-mails, transcripts of interviews. Deutsche Bank commissioned them to expose possible corruption in its own ranks at a time when the US stock market supervision was already investigating because of the China business.

The documents often deal with the question of whether the largest German bank with corrupt practices secured jobs in China between 2002 and 2014. The result of the investigation, which WDR, “Süddeutsche Zeitung” and “New York Times” is present, draws the image of at least highly dubious business practices of the Deutsche Bank in the Chinese market.

A major part of the investigation is concerned with the then Chairman of the Deutsche Bank China, Lee Zhang, who was internally called “Mister China”. He was evidently known internally for not sparing with gifts to influential compatriots: a long list of gifts to managers of state-owned enterprises or even high-ranking Chinese people in the country’s political operations was created internally when the bank began Lee’s behavior To work up Zhang.

Crystal Tiger for $ 15,000, high-quality stereos, televisions, sofas or even luxury travel for decision-makers of state-owned Chinese enterprises should have been given away, apparently to bring the Deutsche Bank into business. That was not all: to arrange a meeting between Josef Ackermann and the then President of China, Jiang Zemin, the Deutsche Bank is said to have paid $ 100,000 to a consulting firm.

In 2014, the bank then sued Lee Zhang for allegedly misappropriating the bank’s millions of dollars in funds. The allegation: Lee Zhang has hired dubious external advisers in China to help the bank navigate China’s economy and politics. The payment of the externals was ever lush, for example, three million euros for six months of advice. Thus, many a consultant played in the salary league of bank directors to the then boss Josef Ackermann.

The incomprehensible: Instead of stopping the flow of money, Deutsche Bank is said to have once again transferred millions to alleged consulting firms.

Lee Zhang wraps himself in silence
A glance at the Panama Papers, the leak of the former law firm Mossack Fonseca, shows that the ignored warners within the bank may have been right: Two of the alleged consulting firms named in Deutsche Bank’s internal investigation report were registered at the controversial law firm.

The sole proprietor was therefore a woman whose identification number, also documented by Mossack Fonseca, identifies her as Lee Zhang’s wife. The bank did not respond to the question as to why Lee Zhang’s wife was the owner of two allegedly external consulting firms that cashed millions from the bank. Lee Zhang also shrouded in silence on all questions.

The confidential investigation brought to light another questionable system: Deutsche Bank is said to have hired hundreds of potential “princes” in China and Hong Kong, relatives of senior officials and heads of state-owned Chinese companies, often to win contracts from these companies in return. According to calculations of an authorized law firm, this could have brought the bank orders in the hundreds of millions. The law firm found more than 200 potential “Prinzlinge” at Deutsche Bank in Asia.

 

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