- Deutsche Bank showered China’s elite with lavish gifts, hired their unqualified family members, and splurged millions on well-connected consultants to build its presence in the country, according to the New York Times.
- The German lender spent more than $200,0000 on decadent presents, hired more than 100 relatives of the Communist Party’s leadership, and paid seven consultants more than $14 million to set up meetings and help it win business, the report found.
- The gifts included crystal animals, vintage wines, Louis Vuitton luggage, golf outings, a trip to Las Vegas, and a sofa, according to confidential documents prepared by Deutsche Bank and its outside lawyers that the Times reviewed.
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Deutsche Bank showered China’s elite with lavish gifts, hired their unqualified family members, and splurged millions on well-connected consultants to build its business in the country, according to the New York Times.
The German lender splurged more than $200,000 on crystal animals, vintage wines, luxury luggage, golf outings, overseas trips, and other presents to curry favor with China’s ruling class, the report found.
It paid seven consultants more than $14 million to help it schedule meetings with top officials and executives, win roles in public listings, and strike deals with state-owned companies.
It also hired more than 100 relatives of the Communisty Party’s leadership, many of whom it determined weren’t equipped to work at the bank. Just 19 of those brought in $189 million in revenue, the Times reported.
The revelations stem from a raft of confidential documents reviewed by the Times, which were prepared by Deutsche Bank and its outside lawyers and obtained by German newspaper Süddeutsche Zeitung. They include emails, spreadsheets, internal investigative reports, and transcripts of interviews with top managers.
Here’s a list of Deutsche Bank’s gifts and favours, according to the Times report:
- A crystal tiger and a Bang & Olufsen sound system, worth a combined $18,000, given to Chinese President Jiang Zemin
- A $15,000 crystal horse, given to Chinese Premier Wen Jiabao
- $10,000 worth of golf outings and a trip to Las Vegas, given to Wen’s son Winston
- A $4,254 bottle of 1945 Château Lafite Rothschild, given to a senior state banking official
- Golf clubs and a bag valued north of $2,500, gifte to an executive from state-owned oil giant PetroChina
- Louis Vuitton luggage, cashmere overcoats, golf clubs, and a sofa worth more than $22,000 in total, given to bosses of China Life Insurance, which selected Deutsche Bank to help oversee its IPO in 2003.
- More than $5 million in consultancy fees paid to Winston Wen’s golf partner, who also worked for his mother’s diamond company.
- More than $3 million paid to a consultant with no banking experience but a connection to PetroChina, to help Deutsche Bank secure a role in the IPO of Industrial and Commercial Bank of China.
- $100,000 paid to an “obscure company” to set up a meeting between Deutsche Bank’s CEO at the time and the Chinese president.
- $3.65 million and $100,000 paid to Amazing Channel and Speedy Link respectively, two offshore companies which appear to be owned by Ji Zhengrong — the wife of Lee Zhang, the Deutsche Bank executive who masterminded the China growth campaign.
Deutsche Bank didn’t immediately respond to a request for comment from Markets Insider. It downplayed the giftgiving and hiring practices in an interview with the Times.
“This was part of doing business in this country,” former CEO Josef Ackermann told the newspaper. “At the time, this was the way things were done.”
“These events date back as far as 2002 and have been dealt with,” Tim-Oliver Ambrosius, a Deutsche Bank spokesman, told the Times. The bank has “thoroughly investigated and reported to authorities certain past conduct” and “enhanced our policies and controls, and action has been taken where issues have been identified,” he added.