Deutsche opens inquiry into Schneider debacle

FRANKFURT - Facing unprecedented public criticism over its links to the collapsed Schneider property group, Deutsche Bank yesterday launched an internal investigation to find those responsible for its disastrous loan policy, writes John Eisenhammer.

'When we know what has happened, there will be consequences for personnel,' said Hilmar Kopper, the chief executive of Germany's biggest bank, which is owed DM1.2bn ( pounds 486m) by the fugitive property tycoon.

Asked whether this action could include members of the board, Mr Kopper replied: 'I do not know if they were involved, but everyone involved will be investigated.' The inquiries will be completed in eks, he said.

Mr Kopper, along with the two board members mainly involved with the Schneider group, Ulrich Weiss and Georg Krupp, are to hold a news conference on Monday. The bank's handling of the affair so far contrasts markedly with its aggressively defiant rejection of all criticism when Metallgesellschaft, in which Deutsche is a big shareholder and creditor, nearly collapsed in January.

'I do not argue that we have not made mistakes somewhere,' he said. 'It hurts our pride, of course, but every star pupil is caught out by not doing his homework properly.' Mr Kopper said losses will not be passed on to customers via higher charges but could hit shareholders.