Deutsche Bank loses two corporate finance heads

Douglas Morton and Venky Vishwanathan have been placed on leave from Deutsche Bank, part owner of Hua Xia Bank, which has recently come under official scrutiny.
Hua Xia's vice president Wang Yaoting is under inspection
Hua Xia's vice president Wang Yaoting is under inspection

Two of Deutsche Bank’s investment banking heads have been put on leave, according to a source close to the company.

Douglas Morton, who worked out of Hong Kong and oversaw its investment banking unit, and Venky Vishwanathan, who was based in Singapore and led capital markets activities, are now on leave, the source said.

The departures of Morton and Vishwanathan, co-heads of corporate finance in Asia at the German bank, come two-and-a-half weeks after the Beijing branch of China’s anti-corruption body opened a case against a vice president of Hua Xia Bank, which is part-owned by Deutsche Bank.

Deutsche Bank declined to comment.

In a May 4 filing with the Shanghai Stock Exchange, Hua Xia Bank said it received notice that the CPC Beijing Discipline Inspection Commission had put one of its vice presidents, Wang Yaoting, under investigation for suspected disciplinary violation. Since the announcement on May 4, Hua Xia shares have lost 4.89%.

Wang is a vice chairman at Hua Xia Bank and party committee member, according to his bio on the bank’s website. He previously held senior positions in the Jiangsu provincial government as well as Hua Xia Bank's Nanjing branch. Nanjing is the capital of Jiangsu.

Chinese President Xi Jinping launched an anti-corruption campaign to clean up the party’s ranks shortly after taking power in the once-in-a-decade leadership transition in 2013. Xi vowed to weed out high-ranking “tigers” and lowly “flies” in the bureaucracy. Present and former officials at a number of state-run enterprises have come under scrutiny this year. Zhou Yongkang, the former security chief and Politburo member who once stood atop the nation's oil and gas sector, was detained April 3 on bribery, abuse of power and national security-related charges.

In a February filing with the Shanghai Stock Exchange, the Bank of Beijing said its former chairman of directorate and the company’s main shareholder and director Lu Haijun was placed under investigation for suspicion of serious disciplinary violations, a common euphemism in China for corruption.

Deutsche's Hua Xia link
Deutsche Bank and Hua Xia's relatonship came about as the German bank sought to increase its footprint in China amid rapid development in the mainland's financial markets.

In May 2006 Deutsche Bank purchased 416 million shares, or 9.9% of Hua Xia's issued share capital. The deal allowed the German Bank one seat on the bank's board. Hua Xia was at the time China’s 11th largest lender, with 266 branches in 27 cities.

Deutsche Bank boosted its stake in Hua Xia in March 2008, purchasing 265.6 million new Hua Xia shares for Rmb3.9 billion ($550 million). As of March this year, the German banked owned 19.99% of Hua Xia.

The two entities agreed to a wide range of commitments, including a credit card joint venture, which launched in China in June 2007. Other initiatives included partnering in an affluent customer business, distributing investment products, and jointly offering cash management services.

Deutsche Bank also pledged to provide technical support and assistance to Hua Xia to boost its existing franchise in risk management, retail and corporate banking.

Hua Xia began operating in Beijing in 1992, becoming a nationwide joint stock commercial bank after restructuring in 1995. It went public in September 2003.

As of year-end 2013, Hua Xia’s total assets reached Rmb1.67 billion, a 12% rise over Rmb1.49 billion in year-end 2012. Loans meanwhile totalled Rmb823.2 million in 2013, or 14.3% over the prior year, according to the bank’s annual report.

 

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