DekaBank said the three heads of its troubled real estate funds resigned after it became known they already knew on April 8 that the market value of the real estate funds was 512 mln eur below the appraised value but failed to act, it said.
'Management neither reacted to this (information) nor informed DekaBank´s executive board or supervisory board,' CEO Axel Weber said at a press conference yesterday.
He added he does not believe there was criminal intent involved as the three managers -- Willi Alda, Andreas Schreurs and Jochen Ackermann -- did not make a profit as a result of their breach of duty.
Rainer Mach, currently supervisory board member of DekaBank Luxembourg SA will now head the unit while Fritz Oelrich, supervisory board member, will temporarily act as deputy head.
CEO Axel Weber emphasised that the valuation gap of about 500 mln eur will result in adjustments which are already included in the current 2 pct return on investment forecast for the real estate funds.
Last week, the owners of DekaBank -- the German Savings Bank Association DSGV and the association of regional state-owned Landesbanken GLB -- said they will not buy shares in the troubled bank´s underperforming real estate funds returned by disgruntled customers, which so far amount to about 1.6 bln eur.
Weber then told Handelsblatt newspaper DekaBank sees a burden of up to a low double-digit mln eur amount from investments returned by customers, with every 1 bln eur of returned shares resulting in about a 3 mln eur effect on the books.
Source: Freeman News