German authorities have launched a probe into Deutsche Börse head Carsten Kengeter. At the center of the investigation is a suspicious share purchase the CEO made ahead of merger plans with the London exchange.
German investigators launched an inquiry on Wednesday into whether Kengeter was guilty of insider trading ahead of the decision by Deutsche Börse and London Stock Exchange (LSE) to unveil their merger plans.
The Deutsche Börse CEO is suspected of acquiring 4.5 million euros ($4.8 million, 3.8 million pounds) in shares two months before the companies announced they were planning to merge in February 2016. The decision subsequently sent their share prices soaring.
Deutsche Börse released a statement in English saying prosecutors "today investigated at Deutsche Börse AG in respect of a share purchase by its chief executive officer which was carried out on 14 December 2015." They said Kengeter was being transparent and cooperative in the investigation.
Responding to the allegations, a Deutsche Börse spokesman said the company had asked Kengeter "to act as a real entrepreneur" and acquire company shares. "This is what Mr. Kengeter has done," the spokesman said. A chairman of the company, meanwhile, said the accusations were "groundless."
The planned merger between Deutsche Börse and LSE would create one of the largest stock exchanges in the world. Having already drawn controversy from countries like France, Belgium, Portugal and the Netherlands, the proposed deal hit a further snag after the UK's decision to leave the EU in a June referendum.
In June, German financial sector watchdog BaFin said it was opposed to the merged company being based in London following the so-called "Brexit." "It is hard to imagine that the euro area's most important stock exchange would be managed out of a site outside of the EU."
blc/jm (dpa, AFP)