The chief executive of Germany’s top asset management firm DWS Group has resigned hours after the company’s offices in Frankfurt were raided by police over allegations of greenwashing.
DWS said in a statement on Wednesday morning that Asoka Wöhrmann, chief executive since late 2018, would step down as of June 10, the day after the group’s annual shareholders’ meeting.
He will be replaced by Stefan Hoops, previously head of the corporate bank at Deutsche Bank, DWS’s majority owner, which holds an 80 per cent stake.
Hoops, who has been with Deutsche Bank for his entire career and is close to its chief executive Christian Sewing, will be replaced in turn by British-born David Lynne, who currently heads Deutsche’s corporate business in the Asia-Pacific region.
The departure of Wöhrmann, another ally of Sewing and once Deutsche’s most senior retail banker in Germany, comes amid rising scrutiny of DWS after allegations of greenwashing by a whistleblower. It is also yet another setback for Deutsche Bank as it attempts to move on from a decade of scandals and multibillion-euro losses.
The executive reshuffle came shortly after about 50 German police raided the offices of DWS and Deutsche Bank in downtown Frankfurt on Tuesday as part of an investigation into potential prospectus fraud at the asset manager. The search involved public prosecutors from Frankfurt, federal police and officials from the German financial regulator BaFin.
BaFin launched an investigation into DWS last year, following a similar probe by the US Securities and Exchange Commission, which was prompted by allegations from former DWS executive Desiree Fixler.
Fixler said the company had made misleading statements in its 2020 annual report over claims that more than half the group’s $900bn assets were invested using environmental, social and governance criteria.
DWS has denied any wrongdoing, but has changed its ESG criteria since Fixler’s revelations. In its 2021 annual report, published in March 2022, DWS reported just €115bn in “ESG assets” for 2021 — 75 per cent less than a year earlier when it stated that €459bn in assets were “ESG integrated”.
The group’s shares had fallen 7 per cent by midday on Wednesday in Frankfurt, while Deutsche Bank’s shares were slightly up.
The change at the top of DWS comes amid growing scrutiny of ESG assets across the industry, and the method by which they are assessed.
Recent analysis of rating agencies found they used divergent criteria to size up ESG investments and the US securities regulator is poised to crack down on exaggerated ESG credentials in investment products, preparing standards for the sustainable funds industry that has boomed to almost $3tn.
HSBC’s asset management unit recently suspended its global head of responsible investing after he accused central bankers and policymakers of overstating the financial risks of climate change in an attempt to “out-hyperbole the next guy”.
Wöhrmann’s replacement comes a few months after the Financial Times revealed that Deutsche Bank was investigating a €160,000 payment made by a client to the senior banker, when he was head of the lender’s private client business. The executive said the transfer was part of a failed attempt to buy a Porsche.
Wöhrmann has also faced criticism over his use of a personal email address for business purposes during his time at Deutsche.
In a statement released by DWS, Wöhrmann said he was leaving “to clear the way for a fresh start”, as “allegations made against DWS and myself in past months have become a burden for the company, as well as for my family”.
Karl von Rohr, chair of DWS, said that Wöhrmann had played a “major role” in the bank’s asset management operation in recent years. “Under his leadership, DWS has expanded its market position and performed well in a recently challenging environment,” he said.
While Sewing, who had stood by Wöhrmann, said that he wanted to thank him “for his impressive work and performance for DWS and Deutsche Bank”.
Wöhrmann’s total compensation increased by 15 per cent to €6.9mn last year, despite the group losing €1bn in market capitalisation in a single day after investigations by US law enforcement authorities were made public.
Additional reporting by Owen Walker