Zhang Hongli lawsuit 'will hurt Deutsche Bank's ICBC relationship'
Sources say Deutsche Bank once enjoyed tight business dealings with the mainland bank
The US$6.3 million lawsuit filed by Deutsche Bank against Industrial and Commercial Bank of China (ICBC) executive Zhang Hongli will hurt the German lender's long-term relationship with the mainland bank, people who worked at Deutsche Bank at the same time as Zhang said.
Zhang's mainland connections were instrumental to the German bank in setting up its mainland presence, sources said.
Under Zhang's leadership, Deutsche Bank partnered with ICBC in 2005 in offering investment banking services on the mainland. In 2006, Deutsche Bank became a book runner for ICBC's US$19 billion initial public offering in Hong Kong, the world's largest at the time.
Deutsche Bank's lawsuit alleges that Zhang breached his fiduciary responsibility by transferring US$3.9 million to an offshore company held by his relative without approval. The bank has now offered Zhang an out-of-court settlement, demanding that he pay back the transferred amount but forgoing accumulated interest of US$2.3 million.
"Things have gone wrong," a person who worked with Zhang at Deutsche Bank said of the German lender's once-tight relationship with ICBC. "This will hamper their business with ICBC in the future."
The suit would not likely provoke mainland regulators, however, as it was directed at an individual, not the bank, the person said.
