German Prosecutors Review DWS CEO Woehrmann’s Role in Deals

(Bloomberg) -- German prosecutors are looking into the relationship between Deutsche Bank AG's asset management chief and a businessman involved with two companies that the bank and its asset manager took stakes in, according to people familiar with the matter.

The prosecutors -- together with Germany's federal criminal police office, or BKA -- are probing whether the ties between investor Daniel Wruck and Asoka Woehrmann, DWS Group's chief executive officer, had any undue impact on business deals, said the people, who asked not to be identified because the matter isn't public. The investigation is looking at the role Woehrmann played in Deutsche Bank's investment in German start-up Auto1 Fintech in 2018, and DWS's acquisition of stakes in two units of financial technology company Arabesque Group, the people said.

The review is at an early stage and the outcome remains open, one of the people said. It's not clear if Woehrmann or Wruck are targets of a formal probe.

“Asoka Woehrmann emphatically rejects the allegations and insinuations made by selective and misleading leaks,” DWS said in a statement. “While we are unaware of any ongoing investigation, Mr. Woehrmann would happily respond to and cooperate with any potential enquiry.”

Wruck said through a spokesman that he wasn't aware of any probe and declined to comment further. A spokesman for Deutsche Bank declined to comment. A representative for the prosecutors declined to comment. BKA said it never comments on whether or not it has a probe ongoing and never comments on personal data. A representative for Auto1 Fintech declined to comment. Arabesque said it was not aware of any investigations into the investments by DWS Group into its units, according to an emailed statement.

“All institutional investments into Arabesque S-Ray and Arabesque AI were completed after full market standard investment due diligence conducted by the investing institutions, supported by international law firms and financial advisers, and were all undertaken on fully arm's length, independent and professional bases,” the firm said in a statement.

The investigation could be another blow for Woehrmann, who is separately trying to fight allegations that his firm overstated its environmental, social and governance capabilities. The claims have prompted regulatory probes in the U.S. and Germany. DWS, which is almost 80% owned by Deutsche Bank, has denied the allegations.

Wruck manages Ice Field Dry Ice Engineering, a company that cleans chemical plants. He was an investor in Auto1 Fintech, according to people familiar with the matter and the website for the holding company. He was a paid adviser to Arabesque Group, the parent company of Arabesque S-Ray and Arabesque AI, two units in which DWS invested in 2019 and 2020, an Arabesque spokesman confirmed. Wruck did not introduce Arabesque to DWS or any of the company's senior management team to Woehrmann, Arabesque said in a statement.

The review has included questions regarding bank transfers between the two men, the people said. Woehrmann made a 160,000 euro ($179,330) payment to Wruck in 2017, which was later returned to Woehrmann in 2018, the people said.

The original payment was meant for Wruck to buy a new Porsche Panamera on behalf of Woehrmann and it was returned after the car purchase fell through and Woehrmann bought a vehicle on his own, attorneys for Woehrmann have said. The Financial Times reported on the transactions last week.

Deutsche Bank in 2018 took a minority stake in Auto1 Fintech, which aimed to provide financing to dealers using Auto1's platform to match car buyers and sellers. A document dated December 2017 suggests Woehrmann, who was Deutsche Bank's retail banking chief at the time, was being considered as future chairman of the startup.

DWS invested in 2020 in Arabesque AI, which uses artificial intelligence to predict stock price developments, according to a statement at the time. That came months after it took a small stake in Arabesque S-Ray, a data provider that uses its data and ESG metrics to assess companies and their performance, according to its website.

While Woehrmann is a trusted lieutenant of Deutsche Bank Chief Executive Officer Christian Sewing, the negative news flow around DWS has annoyed the bank's top brass, Bloomberg reported late last year. Still, Sewing said last week that Woehrmann has “done an outstanding job.”

He took over the DWS job in 2018, soon after the asset manager's poorly received initial public offering. Investors had yanked billions of euros from its funds and Sewing asked Woehrmann to turn the asset manager around after he'd impressed him running the bank's German retail operations. He managed to stem the outflows and morale improved.

It looks to be paying off. Last week, the firm reported assets under management had exceeded the coveted $1 trillion mark.

Read more: Deutsche Bank's DWS Pulls In Over $16 Billion of Client Cash