Investigators in Munich searched offices of Deutsche Bank's board of directors late Monday, including those of CEO Josef Ackermann, as part of a probe into allegations that the bank's leaders gave false testimony in a bitter bankruptcy dispute with the late German media tycoon Leo Kirch.

Ackermann, his predecessor Rolf Breuer, and the current chairman of the bank's supervisory board, Clemens Börsig, are suspected of making false statements and manipulating the 2002 bankruptcy trial of Kirch.

If a Munich court finds that Deutsche Bank bears some responsibility for triggering the bankruptcy of the Kirch media empire, it could cost Germany's biggest bank dearly. The late media mogul's legal team is seeking damages totaling two billion euros ($2.7 billion).

A Deutsche Bank spokesman has called the allegations “unfounded” and condemned the prosecutor's move as “disproportionate.”

Ackermann in the limelight

The bank has filed a motion seeking to remove the judges in the Munich trial amid doubts over their independence.

Ackermann quits bid to head supervisory board

Deutsche Bank said that the search and investigation had nothing to do with Ackermann's decision on Monday not to seek the post of chairman of the bank's supervisory board.

Ackermann, who has been CEO of Deutsche Bank for nine years, said in a statement that “the current situation in the financial markets and the political regulatory environment require his full attention,” depriving him of the “necessary time to hold talks with shareholders to promote his bid for supervisory board chairman.”

The withdrawal of Ackermann's candidacy means the post will be filled by Paul Achleitner, the current chief financial officer of German insurer, Allianz.

Next year, Ackermann will also be replaced as Deutsche Bank's CEO by co-CEOs Anshu Jain, who currently leads the investment bank division, and Jürgen Fitschen, the head of regional management.

That move, announced in July, solves the succession question, but has raised the issue of how the two will divide their responsibilities.

Deutsche also fined for alleged investment fraud

The personnel changes come as Deutsche Bank and US bank, Citigroup, also agreed on Monday to pay a total of $165.5 million (122.5 million euros) to settle claims by regulators that they misled five failed US credit unions about the risk of mortgage-based securities. Deutsche Bank's share of the penalty is $145 million.

Buyers of the mortgage securities made money from their investments, if the underlying debt was paid off. But, as US homeowners began defaulting in large numbers in 2007, the securities failed and the buyers lost billions.

The settlement is the latest of many involving the role of big Wall Street banks before the financial crisis erupted in 2008.

Author: Gregg Benzow (dpa, AP, Reuters)

Editor: Andreas Illmer