VIPsight - September 2012

COMPANIES

Investigations against Deutsche Bank in the Libor scandal

The U.S. Department of Justice is stepping up its investigation into the Libor manipulations by major international banks. The Deutsche Bank is one of the institutions being intensively investigated. The authorities are stilI checking whether and to what extent different institutions’ traders colluded over the years in the definition of reference rates such as Libor or Euribor. Banks allegedly put their funding costs too low in order to appear as healthy as possible. Thus the Libor came out lower than it should have been. Besides Deutsche Bank, Barclays, Citigroup, HSBC, JP Morgan Chase, RBS and UBS have received written orders from the attorneys general of the states of New York and Connecticut. Anshu Jain has described the Libor interest-rate manipulation scandal as “a very serious matter.” At the same time, he assured there would be a comprehensive account from his Bank. The Deutsche Bank had expended significant resources to investigate the operations, said the co-CEO in Berlin.

EADS knew of bribes

A division in the European Aeronautic Defence and Space Company (EADS) is under suspicion of bribery. UK regulators are investigating the company in connection with a telecommunications transaction on behalf of the Saudi Arabian National Guard. This is responsible for the protection of the royal family, and commissioned from EADS subsidiary GPT Special Project Management, a group division which provides monitoring and communication devices, communication services for over 3.3 billion dollars. A spokesman for the Serious Fraud Office (SFO) said on 9 August that the office had begun an investigation. Mike Paterson – at the time Controller at GPT – had informed his superiors in 2007 of payments that a subsidiary of EADS in Saudi Arabia paid into an account in the Cayman Islands. He first contacted the manager of GPT and the head of GPT’s parent Paradigm, which in turn belongs to Astrium, the space division of the aviation and aerospace group.

Semi-annual ProSieben teleconference omits provisions

At ProSiebenSat.1 competition watchdogs had agreed arrangements with the RTL group, according to which previously free programmes should have only encrypted access for a fee. The quarterly report shows that the Munich firm in July agreed in principle with the Bundeskartellamt on an amicable termination of the antitrust process spanning many years. During this process the media group set aside 27.5 million euros. Experts had not expected this provision until a later quarter. For the settlement ProSieben must milk its self-imposed budget, specified in the 2011 Annual Report at up to 30 million euros, almost dry. However, the management said not a word of these provisions in the otherwise detailed conference call presenting the half-year figures. This is even though the amount represents 20 percent of pre-tax profit and thus has capital-market relevance.

Asklepios stocks up further at Rhön-Klinikum

Asklepios wants to prevent a Fresenius takeover of Rhön-Klinikum at all costs. The hospital operator had registered a preliminary inquiry on a minority stake in its competitor, wanting to know what the consequences of an increase to an amount of 10.1 percent and more might be, said a Bundeskartellamt spokesman on 31 August . With ​​a blocking minority it could block such major decisions as capital measures or charter amendments in the MDAX Group, since according to the statutes the agreement of more than 90 percent of the capital represented is necessary for this. Asklepios had surprisingly bought into Rhön-Klinikum at the end of June with just over five percent, thus wrecking the proposed acquisition of Rhön by Fresenius for the time being. The family firm wants to push for the independence of the Rhön group and increase its share. Asklepios also demanded that core functions of Rhön not be outsourced, nor profits abstracted.