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German police raid Deutsche Bank in 'Panama Papers' probe

AFP  |  Frankfurt 

German prosecutors raided several offices in the area Thursday over suspicions of laundering based on revelations from the 2016 "Papers" data leak.

Prosecutors said they were investigating allegations that Germany's biggest lender helped clients set up offshore companies in tax havens to "transfer from criminal activities" to accounts.

The latest raid was a new blow to the financial institution that has been hammered by a string of scandals linked to its pre-2008 crisis attempts to compete with Wall Street

Some 170 police officers and investigators from the prosecutor's office were searching six of the bank's premises in and around the city, the prosecutors said in a statement.

said it was "fully cooperating" with the authorities on the case which it said was "related to the Papers".

The Papers scandal that erupted in 2016 with a massive data leak from Panamaian legal firm exposed large-scale tax evasion, laying bare how the world's wealthy and powerful stashed their assets in offshore businesses.

Deutsche Bank was among hundreds of financial institutions whose names cropped up in the

The prosecutors said their probe was focussing on two Deutsche Bank employees aged 50 and 46, as well as several unnamed senior staff members.

Based on information from the Panama Papers, they are accused of "failing to report suspicions of laundering" linked to offshore firms involved in tax evasion "even though there was sufficient evidence" to suggest illegal activity, prosecutors said.

said one of Deutsche Bank's offshore branches one the handled transaction volumes worth 311 million euros (USD 354 million) for more than 900 clients.

"There is currently suspicion that most of the money stems from foreign tax offences." Shares in Deutsche Bank were down 3.4 percent at 8.30 euros in the early afternoon, making them the worst performing stock on the index.

The raids are the latest embarrassment for embattled Deutsche Bank, which has repeatedly been rapped by regulators for lax controls.

Markus Meinzer, director of the Financial Secrecy Tax Justice Network, said the "raid is long overdue because the have amply illustrated how cooperated with banks in setting up structures with one single aim: to help clients hide their true identities."

"As banks in manage roughly three trillion euros of interest yielding assets, the potential for abuse is enormous... owes to the world to clamp down on this dark side of its "

In September, Germany's BaFin took the unusual step of embedding auditors from at Deutsche to monitor the bank's progress in battling illegal transactions such as money laundering, terrorist financing and dealings with organised crime.

In 2017, Deutsche already had to pay a fine of almost $630 million after an investigation by British and American authorities into laundering of money originating in

Soon afterwards, the ordered a further fine of USD 41 million over gaps in the bank's surveillance.

Deutsche Bank has also come under scrutiny over its activities as a for scandal-plagued Danske Bank, Denmark's largest lender.

Citing people familiar with the matter, had reported that Deutsche was the a Danske whistleblower said had handled almost USD 150 billion of suspect transactions originating in the Danish firm's Estonian branch.

Deutsche Bank is in the throes of a major restructuring plan, with 7,000 jobs to go by the end of 2019.

The bank said at the end of October that it expected to report a net profit for the first time since 2014, not least because no legal settlements in the hundreds of millions or even billions were on the horizon as in previous years.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 29 2018. 18:55 IST