Saunders may enlist Milken for comeback

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Robin Saunders, who was ousted as head of the German bank WestLB's principal finance business last year, has approached Michael Milken, the junk bond king, as a potential investor in a deal that would mark her comeback in corporate finance.

Mr Milken has an even more colourful reputation as a financier than Ms Saunders, having been jailed in the 1990s for US securities law violations. He was forced to hand over more than $1bn in fines and repayments.

Ms Saunders, who left WestLB Panmure at the end of December, is not thought to be going into business directly with Mr Milken. Contrary to rumours of her setting up her own investment vehicle with the help of financial backers, she is said to be looking at putting individual deals together instead.

A friend said: "She is looking at specific deals and talking to different investors about different deals but she's not going to go out and start up Robin Saunders Venture Capital or whatever."

Ms Saunders has been courting Mr Milken as a potential backer for a deal, possibly in the telecoms sector. "She has spoken to him about investing in one specific deal but she's not about to go into business with him," the friend said.

Ms Saunders - one of the wealthiest women in the City - saw her reputation dented last year after WestLB had to raise provisions for losses at BoxClever, the television rental business. Those losses and others at the principal finance business prompted Germany's banking regulator, BaFin, to carry out a wide-ranging review of the lender's risk controls.

The regulator concluded that WestLB needed further to increase provisions to cover potential liabilities at some of the companies in which it had invested, and criticised the practice of allowing employees to invest their own cash in companies they were putting WestLB's money into. Ms Saunders and some of her team invested in several WestLB projects.

She had looked at creating a consortium to buy the business from WestLB before the bank decided to exit it.

Mr Milken was indicted on 98 charges of racketeering and securities fraud and agreed to plead guilty to six of them. He served two years in prison, but since his release he has emerged as a hard-hitting and expensive business adviser. Since being diagnosed with prostate cancer in 1993, he has donated millions to help find a cure.