Deutsche Morgan Grenfell may sue fund auditors and trustees

Deutsche Morgan Grenfell is considering taking legal action against the auditors and trustees of the three unit trusts formerly managed by Peter Young, who is now being investigated by the Serious Fraud Office.

The role of auditors KPMG and General Accident, former trustees of the funds, will be scrutinised by DMG once all its own investigations into the three trusts have been completed.

"The priority now is to complete the investigations before we make any other decisions," a DMG spokesman said.

DMG and its German parent Deutsche Bank are determined to complete an exhaustive investigation before taking any further action relating to the problems at the funds. Already the offer of resignations by a number of senior personnel have been refused and will not be reconsidered until the internal inquiries are finished.

Hilmar Kopper, spokesman of Deutsche Bank's board of managing directors, said: "We know there were deficiencies in controls, but it is very important to see that those in charge immediately realised that they had not, here and there, lived up to what was expected of them. It was in a sense of mutual trust that they came to us, accepted they had failed and offered their resignations. We are looking into it, but we want to be fair. Firm but fair."

Mr Kopper reassured investors that safeguards had already been put in place to ensure that there will be no repeat of the problems at the three European Trusts. "We as a group acted in a most responsible way," he said. "We acted quickly and we acted decisively. Today everything on the surface is in order for the investors. The important thing for them is that they are backed by a financially strong and solid organisation."

However, Mr Kopper stressed that the internal investigations were designed not just to establish the facts but also to see what lessons could be learned for the future. "We want to see if we need an even more independent set of controls and a more precise and definite check on whether necessary changes have been implemented fast and fully," he said.

He denied that control of Morgan Grenfell Asset Management would pass back to Frankfurt but hinted that the unit trust business might be absorbed into Deutsche Bank's European mutual funds business.

"Control must be where the business is and where the regulatory framework has to be observed and that is London," Mr Kopper said. "The other issue is whether the rather small unit trust business should form part of the rather important mutual fund business we have in Europe as a whole. We will decide that over time but there is no immediate urgency."

Mr Kopper also reaffirmed that the problems with the unit trust business have not soured Deutsche Bank's view of its London-based investment banking operations.

"We are where we want to be with investment banking and have completed about 85 per cent of our task," he said. "It takes a long time in investment banking because you just can't switch a lever."

However, he denied suggestions that the bank has been overpaying new recruits and encouraging a performance-led mentality.

"It is nonsense to say we are overpaying. People do not leave us so that they can be paid less," Mr Kopper said.

"I believe that salaries in the industry are too high but no one has proved to me that we are paying more than the norm. We would be stupid if we do overpay. Good people join us because behind the name they find something they can mould."

Voices
A Russian hunter at the Medved bear-hunting lodge in Siberia
Save the tigerWildlife charities turn to those who kill animals to help save them
News
Davis says: 'My career has been about filling a niche - there were fewer short actors and fewer roles – but now I'm being offered all kinds of things'
PeopleWarwick Davis on Ricky Gervais, Harry Potter and his perfect role
News
i100
Sport
Frank Lampard will pass Billy Wright and equal Bobby Charton’s caps tally of 106 caps against
sportFormer Chelsea midfielder in Etihad stopgap before New York contract
PROMOTED VIDEO
Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
Arts and Entertainment
A scene from Aladdin is performed at the Tony Awards in New York in June
theatreBrit producer Lythgoe makes kids' musical comedy a Los Angeles hit
Sport
Usain Bolt of Jamaica smiles and shakes hands with a competitor after Jamaica won their first heat in the men's 4x100m relay
sport
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Life and Style
A small bag of the drug Ecstasy
Health
Life and Style
Floral-print swim shorts, £26, by Topman, topman.com; sunglasses, £215, by Paul Smith, mpaulsmith.co.uk
FashionBag yourself the perfect pair
News
news
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
News
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
Extras
indybest
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Save the Tiger: Meet the hunters tasked with protecting Russia's rare Amur tiger

Hunters protect Russia's rare Amur tiger

In an unusual move, wildlife charities have enlisted those who kill animals to help save them. Oliver Poole travels to Siberia to investigate
Transfers: How has your club fared in summer sales?

How has your club fared in summer sales?

Who have bagged the bargain buys and who have landed the giant turkeys
Warwick Davis: The British actor on Ricky Gervais, how the Harry Potter set became his office, and why he'd like to play a spy

'I'm a realist; I know how hard this business is'

Warwick Davis on Ricky Gervais, Harry Potter and his perfect role
The best swim shorts for men: Bag yourself the perfect pair and make a splash this summer

The best swim shorts for men

Bag yourself the perfect pair and make a splash this summer
Has Ukip’s Glastonbury branch really been possessed by the devil?

Has Ukip’s Glastonbury branch really been possessed by the devil?

Meet the couple blamed for bringing Lucifer into local politics
Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup