Deutsche Bank chiefs in carbon permits tax probe

Leading executives at Deutsche Bank have been drawn into a carbon permits tax investigation after raids on the Berlin, Dusseldorf and Frankfurt offices of Germany's biggest lender.

German prosecutors said they were investigating 25 staff at the bank for possible tax evasion, money laundering and obstruction of justice. About 500 police and tax inspectors searched the premises, arresting five staff.

The case relates to EU rules limiting the carbon dioxide that companies emit. Businesses that pollute less can sell "credits" to those that need more.

Last year, six men were jailed in Germany for selling carbon emission permits through Deutsche Bank worth more than €300m (£242m). The men bought the permits overseas and paid no tax. They then resold the permits to each other in order to claim back tax illegally.

The company confirmed that board members were now involved in the inquiry.

"Public prosecutors searched Deutsche Bank offices in connection with investigations that have been under way since the spring of 2010 against individuals suspected of tax evasion in the trading of CO2 emission certificates," the bank said in a statement. "Two of Deutsche Bank's management board members Juergen Fitschen and Stefan Krause are involved in the investigations as they signed the value-added tax statement for 2009."