FRANKFURT (Reuters) - Europe’s top banking regulator, the European Central Bank (ECB), is considering carrying out a special assessment of Deutsche Bank’s DBKGn.DE two largest shareholders, a German paper reported on Sunday, citing regulatory sources.
The ECB may launch so-called ownership control procedures to scrutinize both the Qatari royal family and China’s HNA 0521.HK, which each own just under 10 percent of the shares of Germany’s flagship lender, Sueddeutsche Zeitung reported in a prereleased version of its Monday edition.
The ECB and Deutsche Bank declined to comment.
The aim of a such an assessment is to establish whether an investor is trustworthy and financially sound, where the money used for the investment came from, and whether the investor engages in any criminal dealings such as money laundering or terrorist financing.
Normally it is only carried out if a shareholder holds more than 10 percent.
The ECB is, however, for the first time considering using a possible exemption to the rule, which it can activate if it establishes that both Qatar and HNA exert significant influence on the bank despite owning a stake of less than 10 percent, the paper said.
Qatar, which has been a Deutsche Bank shareholder since 2014, and HNA, which acquired its stake this year, have each been granted a Deutsche Bank board seat.
Due to the generally low number of shareholders showing up at annual general meetings the two investors can factually block important decisions.
“It looks like both will be treated as if they held more than 10 percent,” a source told the paper, which also reported that HNA’s investment in Deutsche Bank shares prompted the ECB’s move.
Last week, Germany became the first European Union country to tighten its rules on foreign corporate takeovers, following a series of Chinese deals giving access to Western technology and expertise.
Reporting by Arno Schuetze and Balazs Koranyi; editing by Susan Thomas