Bloomberg News

Deutsche Bank Says Korea Court Orders Freeze on Some Assets

June 09, 2011

(Adds investigation in fifth paragraph.)

June 9 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest lender, said a South Korean court ordered a freeze some of its assets in the Asian nation.

“We understand that a preservation order was granted by a court at the prosecutors’ request and without Deutsche Bank’s arguments being heard,” Michael West, Deutsche Bank’s Hong Kong-based spokesman, said in an e-mailed response to a query. “The order does not reflect the merits of any case that may be heard in the future.”

Deutsche Bank hasn’t received the court order yet and no one at the lender had been charged, West wrote.

The Seoul Central District Court accepted South Korean prosecutors’ requests to temporarily seize assets worth 44.8 billion won ($41 million) from Deutsche Bank’s Seoul branch and its South Korean securities unit, Yonhap News reported earlier, citing legal officials it didn’t identify. Officials at the court’s public relations team declined to comment.

South Korean prosecutors are investigating allegations that Deutsche Bank staff made unfair profit from a plunge in South Korea’s benchmark Kospi Index on Nov. 11. The country’s financial regulators banned Deutsche Bank from trading shares and derivatives for its own account for six months starting from April after saying that the lender’s employees had conspired to manipulate the market. The case was subsequently referred to prosecutors.

‘No Charges’

“The bank continues to cooperate with the prosecutors’ ongoing investigation,” Deutsche Bank’s West said in today’s e- mail. “No charges have been laid against Deutsche Bank, its Korean subsidiaries or staff.”

Scrutiny of equity-market swings has increased globally since a 20-minute drop in U.S. equities on May 6 last year briefly erased $862 billion of market value. South Korea’s Financial Services Commission is drafting revisions to capital- markets laws to increase penalties on stock market manipulation and trading on undisclosed information, Ernst Lee, a spokesman at the regulator, said last month.

--Editors: Darren Boey, Brett Miller

To contact the reporters on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net Shinhye Kang at skang24@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net;


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