The supervisory board of Hypo Real Estate has initiated an independent enquiry into whether there was any breach of duty on the part of former CEO Georg Funke and another management board member, Bo Heide-Ottosen.
The supervisory board of Hypo Real Estate has initiated an independent enquiry into whether there was any breach of duty on the part of former CEO Georg Funke and another management board member, Bo Heide-Ottosen.
The listed property lender said in a statement on Tuesday that legal firm Milbank Tweed Hadley McCloy had been retained 'to examine a possible breach of duty' by Funke and Heide-Ottosen.
Klaus Pohle, who became chairman of the supervisory board last Friday, said in the statement: 'In the interest of the company and all concerned, the supervisory board has decided on an enquiry - the outcome of which remains open - by an independent and notable legal firm.’
A company spokesperson told PropertyEU later that there was no allegation or 'charge' of any specific breach by either of the two men. Nor would the investigation cover any specific timeframe.
Specifically, he said that a report in the Financial Times Deutschland last week was not the spark for the examination. Last Thursday, Hypo Real Estate denied a suggestion in the Financial Times Deutschland that it had withheld information about its liquidity situation to German market regulator BaFIN when an initial EUR 35 bn public-private rescue package was being agreed.
'Two people have left the board and shareholders naturally have questions. It is just a matter of good housekeeping to review the situation,' the company spokesperson said.
Funke resigned a day after Hypo Real Estate secured an enhanced EUR 50 bn lifeline from the German government and financial institutions. Axel Wienandt was appointed CEO to replace Funke hours later.
Heide-Ottosen, who was also on the board of Hypo's Dublin-based infrastructure financing subsidiary Depfa, was one of three officials to exit the Hypo group days before Funke.
