Regulator challenges Deutsche Börse investors

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The Independent Online

German financial regulators have begun an investigation into the shareholders of Deutsche Börse and whether they have tried to exert control over the management of the Frankfurt stock exchange business.

German financial regulators have begun an investigation into the shareholders of Deutsche Börse and whether they have tried to exert control over the management of the Frankfurt stock exchange business.

The move comes as TCI Fund Management, the hedge fund group that owns 8 per cent of the company and which opposed its recent attempt to buy the London Stock Exchange, wrote to the supervisory board of Deutsche Börse requesting the removal of its chairman, Rolf Breuer.

Under the laws of the state of Hesse, which oversees the regulation of Deutsche Börse, investors holding more than 10 per cent have responsibilities to help preserve a "sound and prudent management" of the exchange.

Leading shareholders in Deutsche Börse confirmed yesterday they had received the letter from the German regulator, BaFin, but refused to comment further. TCI also refused to comment.

The regulator's letter will come as a surprise to people used to UK practice where shareholders are free to intervene with the management of companies they own if they see fit.

The letter asks investors if they are acting with others in an effort to influence the actions of both Deutsche Börse's management and supervisory boards. German regulators have the power to block investors raising their stakes or casting their votes. The regulator is trying to clarify if shareholders are working in concert.

The regulator's intervention is the latest twist in the drawn-out saga of Deutsche Börse and its thwarted expansion plans.

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