Deutsche Bank strengthens position in BIG Bank Gdanski
WARSAW: German giant Deutsche Bank, seeking control over Poland's
fifth-largest bank, BIG Bank Gdanski, gained a one-vote majority Saturday on
the supervisory board at a tempestuous shareholders' meeting that had been
suspended two weeks ago.
Together with allies, Deutsche Bank won a vote to expand BIG's supervisory
board from nine to 19 members, then seated nine of its own members on it.
The 10th, swing vote comes from the state-controlled PZU Zycie life insurer,
which switched sides to back Deutsche Bank last month.
The battle coincides with a growing public debate over whether Poland should
allow foreign companies to take over its banks - a sensitive sector in any
economy.
Over a decade of privatization since the fall of communism, the government
has allowed foreign banks to acquire big stakes in Polish enterprises. But
that policy has recently came under fire from lawmakers across the political
spectrum, who fear profits may trickle abroad instead of strengthening the
reforming economy.
In another fight, U.S.-based Citigroup and Germany's Commerzbank have been
competing for control of Poland's leading commercial bank, Bank Handlowy.
The battle seemed settled in favor of Citigroup after Commerzbank announced
Friday it will sell its 10 percent stake in Handlowy to the U.S. bank. The
decision was made after state-controlled insurer PZU decided to sell its key
34 percent stake in Handlowy to Citigroup. Citigroup was expected to
announce its deal on Monday.
In the storm over BIG Bank, Deutsche Bank has asked Polish regulators for
permission to increase its stake in BIG to 24 percent, from 13 percent, to
consolidate and strengthen its position in Poland, a leading trade partner
for Germany.
But the German bank's opponents, grouped around BIG Bank's management, the
Portuguese Banco Commercial Portugues (BCP) and pan-European insurer Eureko,
oppose the request. They charge Deutsche Bank wants to use BIG to extend its
own activity rather than agree on a strategy to develop Poland's major bank.
Members of the new board say they will convene in the coming days to
constitute the board and, possibly, chose the chairman. But the decisions
may still be challenged by Polish regulators and the courts. Deutsche Bank's
opponents question the registration of PZU Zycie votes and point out it had
clear instructions from its parent, PZU, to vote against Deutsche Bank or
allow PZU to vote its shares, and say they may call an extraordinary
shareholders' meeting.
The shareholders meeting originally began Jan. 28, but was suspended after
the Germans managed to unseat BIG's supervisory board and replace it with
one favoring its control. The switch was achieved with aid from PZU and its
subsidiary PZU Zycie, which abstained from voting.
The unexpected outcome resulted in protests from BCP and Eureko and led to
the suspension of the meeting and of its decisions. The two PZU heads were
also suspended and the Securities Commission opened an investigation into
the legality of the decisions. The findings are still to be presented. Ernst
Jansen, representing Eureko at the resumption of the meeting, which began
Friday, told shareholders that the election of a 19-member board defied
normal business practices and showed that the meeting had become a "farce."
"The present situation degrades shareholder value and degrades the
reputation of all institutions involved," Jansen said.(AP)
For reprint rights: Times Syndication Service
|Disclaimer|
For comments and feedback send Email
Bennett, Coleman & Co. Ltd. 1999.