Qatar royal family seeks Deutsche Bank chairman departure after huge investment losses

LONDON – Qatari investors in Deutsche Bank are pressuring the German lender to force its chairman to quit after regulators blocked a banker they backed from a seat on the supervisory board because of a conflict of interest.

The Qataris have been unhappy for months with Paul Achleitner’s stewardship of Germany’s largest bank amid a prolonged stock slump.

Achleitner’s failure to get Swiss banker and former UBS manager Juerg Zeltner onto the supervisory board prompted Qatari investors’ call for Deutsche chairman to leave, according to people familiar with the matter.

Deutsche’s regulators - the European Central Bank and financial markets watchdog BaFin - saw a conflict of interest because Zeltner is also the chief executive officer of KBL European Private Bankers (KBL epb), a business that overlaps with Deutsche’s and is controlled by members of Qatar’s royal family.

Achleitner, whose term ends in 2022, had announced Zletner’s appointment in August at Qatar’s behest, praising him as a valuable addition and a top-level European banker with proven expertise.

Zeltner was also set to represent the interests of Qatar’s royal family – the largest shareholder in the German lender with almost a 10% stake through two Qatari entities, Paramount Services Holdings and Supreme Universal Holdings.

The two primary Qatari investors are former Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabor Al-Thani and the Emir’s father Sheikh Hamad Bin Khalifa Al-Thani, according to Reuters.

The Qatari ruling family’s multi-billion-dollar investment in Deutsche Bank has taken a hammering as the German lender suffers its worst haemorrhage of liquidity since the 2008 financial crisis.

“At least with Qatar's German investments seemingly losing significant sums, their ability to fund hardline Islamists and extremism will be somewhat reduced,” tweeted Julie Lenarz.

Representatives of the Al-Thani ruling family expressed their mounting frustration with Achleitner, telling Deutsche management and other major investors that he should announce his resignation soon.

Deutsche Bank’s share price has nosedived 70% since Achleitner was appointed as chairman in 2012.

In 2016, Paramount Services Holdings supported Achleitner following Deutsche’s poor performance despite the management reshuffle and constant restructuring.

He survived a motion to remove him at this year’s annual general meeting although he failed to stop the bank’s years of losses mainly due to its aggressive expansion into investment banking.

One person with direct knowledge with the matter said that Achleitner should leave in the coming months, while a second said he should announce his exit by next year’s annual general meeting in May at the latest.