* ISS, Glass Lewis back call for independent audit
* Litigation cost Deutsche Bank 15 bln euros since 2009
* Shareholders blame management for high litigation bill
By Arno Schuetze
FRANKFURT, May 3 Advisory group Institutional
Shareholder Services (ISS) called on Wednesday for an
independent audit into the conduct of Deutsche Bank's
management in handling scandals that include the manipulation of
Libor and Russian trades.
Deutsche Bank, which has conducted its own investigation
over poor conduct and has faced a litigation bill worth 15
billion euros ($16.37 billion), previously rebuffed requests for
another audit and has urged investors to look to the future.
It declined to comment after Wednesday's statement by ISS.
The idea of an independent or special audit, first proposed
by small shareholder Marita Lampatz, won backing last week from
Glass Lewis, another proxy voting firm which like ISS advises
shareholders how to vote.
The two firms could force the issue if the proposal wins
support at the bank's annual general meeting on May 18.
A similar call for a special audit of management's handling
of some of Deutsche Bank's largest litigation cases received
46.4 percent of votes at last year's shareholder meeting,
narrowly missing the majority needed to push it through.
Deutsche Bank has settled major litigation cases that
include scandals over the sale of toxic mortgages and sham
Russian trades. A probe into alleged violations of U.S.
sanctions on countries such as Iran is pending and the bank
expects to conclude that by the end of 2017.
Deutsche Bank agreed last year to settle the case over
alleged manipulation of interbank rates such as Libor for a
record $2.5 billion with U.S. and British authorities, which had
accused the bank of obstructing their investigation.
Some shareholders say fines for interest rate manipulation
could have been 100 million pounds ($129 million) less if
management had provided appropriate information to Britain's
Financial Conduct Authority.
They also said Deutsche was slow to improve its reporting
and risk management, while the roughly $2.5 billion in fines
connected to the Libor fine damaged the bank's reputation and
The shareholders said the Russia trading case also showed
the bank did not have an effective anti-money laundering
Deutsche Bank's probe cleared Chairman Paul Achleitner of
accusations that he was partly to blame for poor cooperation
with authorities investigating rate manipulation.
"Considering the chairman's potential involvement in the
wrongdoing and the bank's refusal to disclose details of the
results of the investigations, there are significant doubts
about the supervisory board's ability to investigate potential
wrongdoing by its own members," ISS said.
ISS said a special audit could lay such concerns to rest.
Glass Lewis advised shareholders to refrain from ratifying
the actions of Deutsche's top executives and supervisory board
members for last year. ISS said a such vote was not warranted.
Votes to ratify the decisions by company bosses are
customary in Germany and are an opportunity for shareholders to
express confidence in their leadership. But such votes do not
release individuals from liability for their actions.
($1 = 0.9164 euros)
($1 = 0.7737 pounds)
(Editing by Edmund Blair)