Deutsche Post AG Chief Executive Officer Frank Appel refused to testify, citing business secrecy, in a court case about Deutsche Bank AG’s acquisition of Postbank AG.
Appel argues he would have to disclose confidential information if forced to talk about the way the purchase agreement was structured, Presiding Judge Freimut Gundlach said at a hearing in Cologne, Germany, Wednesday in a case filed by a former Postbank shareholder who claims investors were short-changed.
“The mere language of the initial agreement doesn’t seem to back the claim,” Gundlach said. “So it all depends on what Mr. Appel could say about supplement agreements. We will first have to review whether he can refuse to testify.”
Deutsche Bank spent more than 6 billion euros ($6.6 billion) acquiring stakes in Postbank, reaching about 94 percent in 2012. The acquisition helped the company diversify its funding mix by boosting consumer deposits after the global financial crisis. Germany’s biggest lender now plans to sell the unit as part of a restructuring aimed at reviving profits.
The suit, filed by Effecten-Spiegel AG, was unsuccessful until Germany’s top civil court last year ordered a retrial to examine details of the contractual arrangements.
Appel didn’t have to appear in court Wednesday after his lawyers wrote to the judges to inform them that he’s invoking the privilege. The Deutsche Post CEO is using a pretext to avoid giving evidence, Oliver Krauss, Effecten-Spiegel’s lawyer, told the court.
“If this is about business secrets, then no CEO of any public company could ever testify,” said Krauss.
Appel was right to invoke the privilege and acted in the interest of the company, Deutsche Post spokesman Daniel McGrath said in an e-mailed statement. It’s customary to do so, he said.
Effecten-Spiegel, which is seeking 4.8 million euros in the case, argues Deutsche Bank should have offered other investors the same amount per share it gave Deutsche Post. The transaction agreements, which weren’t fully disclosed by Deutsche Bank, allowed the bank instead to offer only 25 euros under mandatory-offer rules, about half of what Deutsche Post received, according to Krauss.
Philipp Hanfland, Deutsche Bank’s lawyer, said the lender denied any wrongdoing.
The court gave the parties more time to submit further arguments.