The new logo of Deutsche Bank's DWS Asset Management is pictured at their headquarters in Frankfurt, Germany, March 19, 2018.
The new logo of Deutsche Bank's DWS Asset Management is pictured at their headquarters in Frankfurt, Germany, March 19, 2018. Reuters / RALPH ORLOWSKI

The chief executive of top German asset manager DWS will step down next week, he said on Wednesday, a day after raids by prosecutors over allegations that the company misled investors about "green" investments.

The raids and departure of DWS CEO Asoka Woehrmann mark another setback for Deutsche Bank, DWS's majority owner, which has been trying to move on from regulatory breaches, including money laundering and securities misselling, leading to billions in fines.

DWS has been dogged by the accusations for months, prompting German prosecutors to raid DWS and the headquarters of Deutsche Bank on Tuesday.

As firms market their environmental, social and governance-related (ESG) credentials in an attempt to tap the trillions of dollars looking to have climate- and socially-friendly impact, regulators are beginning to dig deeper into their claims.

German and U.S. officials have been investigating reports and a whistleblower's allegations that DWS had exaggerated the green credentials of investments it sold - a practice known as greenwashing. DWS has repeatedly denied that it misled investors.

The DWS's top management change had been in the works for some time but was ultimately made at meetings late on Tuesday in the wake of the raids, a person with direct knowledge of the matter said.

Woehrmann told employees in a memo that it was a joy to see DWS flourish but that "allegations ..., however unfounded or undefendable, have left a mark".

"To quote Charles Dickens: it was the best of times, it was the worst of times," he said in the memo, which was seen by Reuters.

Deutsche Bank, which retained majority ownership of DWS after its initial public offering, has marketed itself as bank companies can turn to as they seek a greener future.

Desiree Fixler, the whistleblower involved in the investigation, told Reuters that the resignation was positive but it did not go far enough.

"It's not just a one man change," she said.

"There's the greenwashing, and there's the cover up. It's a huge culture issue at Deutsche Bank," she said.

DWS and Deutsche Bank declined to comment on Fixler's remarks.


On Tuesday, German prosecutors said that "sufficient factual evidence has emerged" to show that ESG factors were taken into account in a minority of investments "but were not taken into account at all in a large number of investments", contrary to statements in DWS fund sales prospectuses.

The U.S. Securities and Exchange Commission and German financial watchdog BaFin last year launched separate investigations into the whistleblower allegations.

The SEC did not respond to a request for comment, but the U.S. watchdog has been ratcheting up its efforts to police claims companies make about their ESG investments.

The agency proposed a pair of rules last week that would detail how ESG funds can be marketed and how to properly disclose the thinking behind labeling such a fund. SEC Chairman Gary Gensler has said the agency's efforts are aimed at standardizing disclosures around such funds and ensuring investors have reliable information.

The whistleblower, Fixler, a former head of sustainability at DWS, had said the company overstated how it used sustainable investing criteria to manage investments.

In February, Deutsche Bank agreed with the U.S. Department of Justice to extend the stay of a special monitor at the bank after it failed to report allegations involving DWS in a timely manner.

Shares in DWS have slumped 24% since the SEC and BaFin investigations were made public in August last year. They were down about 5% late on Wednesday.

The accusations show "greenwashing is not a trivial offence," said Magdalena Senn of the German consumer advocacy group Finanzwende.

"The raid and the resignation will have a signal effect for other asset managers," she said.

Credit Suisse analysts said Woehrmann's departure was a disappointment because he successfully implemented reform and turnaround at DWS.

"We see the change of leadership heralding a period of uncertainty for DWS' strategy - and could even raise questions over its future as an independent asset management company," Credit Suisse said.

DWS and Deutsche Bank on Tuesday said that the asset manager had cooperated with regulators and authorities in the past and would continue to do so.


Woehrmann has been under pressure on multiple fronts since the greenwashing allegations broke.

Deutsche Bank conducted an internal investigation into Woehrmann's possible private email usage for business purposes, and the European Central Bank also looked into corporate governance issues surrounding him.

He also received threatening letters, including one in December with red crosshairs, white powder and a racial slur.

When asked about the allegations in a DWS earnings call with analysts, Woehrmann said he emphatically rejected all the allegations.

Deutsche Bank CEO Christian Sewing publicly backed Woehrmann in January, and on Wednesday thanked him for "his impressive work and performance".

Stefan Hoops, who has been overseeing Deutsche Bank's corporate banking division since 2019, will replace Woehrmann from June 10, the bank said.

Woehrmann's resignation takes effect on June 9, the day of its annual general meeting.