The CEO of Germany’s leading asset management firm, DWS Group, resigned hours after the firm’s Frankfurt offices were raided by police over allegations of “greenwashing”. [enganar investidores sobre investimentos “verdes”].
DWS said in a statement Wednesday morning that Asoka Wöhrmann, CEO since late 2018, will step down on June 10, the day after the group’s annual shareholders meeting.
He will be replaced by Stefan Hoops, formerly head of corporate banking at Deutsche Bank, the majority shareholder of DWS, with an 80% stake.
Hoops, who has been with Deutsche Bank his entire career and is close to its chief executive Christian Sewing, will be replaced by Briton David Lynne, who currently runs Deutsche’s corporate business in the Asia-Pacific region.
The departure of Wöhrmann, another Sewing ally and once Deutsche’s top retail banker in Germany, comes amid increasing scrutiny from the DWS after receiving allegations of greenwashing. It is also yet another setback for Deutsche Bank, which is trying to overcome a decade of scandals and multibillion-dollar losses.
The executive switch follows a raid by about 50 German police officers at the DWS and Deutsche Bank offices in central Frankfurt on Tuesday, as part of an investigation into possible prospect fraud at the asset manager. The search involved Frankfurt public prosecutors, federal police and employees of the German financial regulator BaFin.
BaFin launched an investigation into DWS last year following a similar investigation by the US Securities and Exchange Commission, which was prompted by allegations by former DWS executive Desiree Fixler.
Fixler said the company made misleading statements in its 2020 annual report about allegations that more than half of the group’s $900 billion (R$4.2 trillion) assets were invested using ESG (environmental, social and governance) criteria. ).
DWS has denied any wrongdoing, but has changed its ESG criteria since Fixler’s revelations. In its 2021 annual report, published in March 2022, the DWS reported just €115 billion in “ESG assets” for 2021 – 75% less than a year earlier when it stated that 459 billion euros (R$ 2.3 trillion) in assets were “integrated with ESG”.
The group’s shares were down 7% as of Wednesday noon in Frankfurt, while Deutsche Bank shares rose slightly.
The ESG industry is facing a growing chorus of criticism from regulators and investment professionals, including over asset valuation methods.
Recent reviews by ratings agencies have found that they have used divergent criteria to size ESG investments, and the US securities regulator is on the verge of cracking down on hyped ESG credentials on investment products, setting standards for the sustainable fund industry, which has grown to nearly US$ 3 trillion (R$ 14.1 trillion).
HSBC’s asset management unit recently suspended its global head of responsible investing after he accused central bankers and policymakers of exaggerating the financial risks of climate change in an attempt to “get over the next guy”.
Wöhrmann’s replacement comes a few months after the Financial Times revealed that Deutsche Bank was investigating a 160,000-euro payment made by a customer to the banker when he was head of the bank’s private client business. creditor. The executive said the transfer was part of an unsuccessful attempt to buy a Porsche car.
Wöhrmann also faced criticism for using a personal email address for business purposes during his time at Deutsche Bank.
In a statement released by DWS, Wöhrmann said he was leaving “to make way for a fresh start” as “the accusations leveled against DWS and me in recent months have become a burden on the company as well as my family”.
Karl von Rohr, chairman of the DWS, said Wöhrmann had played an “important role” in the bank’s asset management operation in recent years. “Under his leadership, DWS has expanded its market position and performed well in a recent challenging environment,” he said.
Sewing, who had defended Wöhrmann, said he wanted to thank him “for his impressive work and performance for DWS and Deutsche Bank”.
Wöhrmann’s total remuneration rose 15% last year to €6.9m (R$35m), despite the group having lost €1bn (R$5bn) in market capitalization in a single day. after the disclosure of investigations by US law enforcement authorities.
Contributed by Owen Walker. Translated by Luiz Roberto M. Gonçalves.
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