German and Swiss public prosecutors investigating allegations of money laundering at Commerzbank have widened their inquiry to include company CEO Klaus-Peter Müller.
Commerzbank expects its CEO to be cleared
A spokesman for Germany's third biggest bank said Commerzbank fully expected Müller to be cleared of any wrongdoing.
"The members of the supervisory and management boards do not understand the widening of the investigation and expect Müller to be completely exonerated," the spokesman said.
Investigators are examining the role of Commerzbank employees in a number of transactions related to Russian telecommunications firm Telecominvest. The inquiry alleges that hundreds of millions of dollars may have been siphoned off from Russian state firms during privatizations in the 1990s.
Prosecutors hope to establish whether staff helped divert money through the Commerzbank's former investment in Luxembourg-based First National Holding (FNH), which owned the holding company based in St. Petersburg. They also are checking to see if investment funds were used to launder assets from the phone company.
Crimi n al activities?
Müller, who has headed Commerzbank since 2001, was in charge of the bank's central and eastern European operations until 1999. In 1996, he led the acquisition of the holding in First National in 1996 as the management board member responsible for Russian lending.
The German regulator is looking at how the bank oversaw transactions, while prosecutors conduct a probe into whether criminal activities took place. Müller's successor, Andreas de Maiziere, resigned in July after German and Swiss authorities began investigating the case, and five executives and former staff at Commerzbank are already under investigation.
Takeover speculatio n
The latest twist in the probe came amid a flurry of fresh speculation that Commerzbank may be facing a foreign takeover.
Hyopvereinsbank in Munich
In a interview with Germany's Welt am So n n tag newspaper, Müller said interest in the bank was growing following the takeover of German rival HVB by Italian bank UniCredito.
"I can't rule out being taken over by a competitor with a higher market capitalization," he said.
France's BNP Paribas has been linked with a possible bid, but Müller he said there were currently "no discussions" with any potential suitors.