Deutsche Bank board spared by Schneider inquiry

DEUTSCHE BANK board members have emerged from the Schneider debacle with heads firmly on their shoulders as the supervisory board yesterday declared the matter closed.

A cursory statement from the board said it had noted the steps already taken by management as a result of the collapse of the Schneider property empire and saw no need for further action.

The survival of the board members, preserving a long Deutsche tradition, came after confirmation that four senior executives had been obliged to resign for their roles in lending DM1.2bn ( pounds 500m) to Jurgen Schneider.

An independent auditor's report had pinpointed two management board members from Deutsche's mortgage arm, as well as two executives from branches in Mannheim and Baden-Baden, as bearing the main responsibility for errors of judgement.

Another two executives at Deutsche Bank headquarters who dealt with overseeing the Schneider loan portfolio had already been retired.

Deutsche Bank is the biggest creditor of Mr Schneider, who has been missing since shortly before Easter. Despite a warrant for his arrest and an international police search no trace of him has been found.

Hilmar Kopper, the bank's chief executive, had insisted at an early stage of the Schneider scandal that no job was safe from the internal investigation into what went wrong, but that no board member would be made a scapegoat simply to appease public opinion.

While the report from the auditors, Wollert-Elmendorff, supported Deutsche's argument that the bank had been the victim of systematic fraud, it also made clear that there had been complacency in the dealings with the property tycoon.

As well as the personnel consequences, Deutsche Bank said it was tightening its entire property finance procedures and in particular strengthening controlling.