Under-fire Deutsche Boerse boss set for grilling on insider trading probe and London location of stock exchange headquarters
Deutsche Boerse chief executive Carsten Kengeter is set to endure some tough questioning tomorrow as he appears before investors, analysts and the media.
The German company, which is seeking to tie-up its merger with the London Stock Exchange in the coming months, reported its preliminary full-year results for 2016 this evening.
Net revenue at the group increased eight per cent to €2.4bn (£2bn) last year, while operating profit rose 18 per cent.
The results come at a time when Kengeter, who will address the media in the morning and then analysts and investors early afternoon, is being investigated by Frankfurt’s Public Prosecutor’s Office over alleged insider trading.
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Deutsche Boerse’s board has given its backing to Kengeter, who is accused of buying shares in the company in December 2015 in the knowledge that a proposed tie-up with the London Stock Exchange was on the way.
However, Spiegel magazine reported at the end of last week that Kengeter had spoken about a possible deal with Lars-Hendrik Röller, an economic aide to Chancellor Angela Merkel, in November 2015.
Kengeter, who is due to become chief executive of the combined stock exchange, is also likely to face questions about the legal headquarters of the combined entity, which under the terms of the deal will be in London.
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Several politicians in the state of Hesse, where Deutsche Boerse is based, have refused to accept this, and Thomas Schaefer, finance minister in Hesse, recently said it was “crystal clear” after the UK Brexit vote that this HQ should be in Frankfurt.
Sources close to the deal have told Morning Wire that the companies may need to offer Hesse further concessions in order to gain approval for the deal.
The exchanges will turn their attention to Hesse once the European Commission has decided whether to approve the deal.
They are due to learn in April whether their concession – the London Stock Exchange sale of its French clearing arm, LCH SA, to Euronext – will be enough to convince the European Commission. Euronext shareholders today gave their backing to the deal, which is dependent on the larger merger completing.