Deka dismisses real estate executives

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GERMANY- Deka Bank has fired three senior executives in charge of its real estate fund arm, claiming the executives lied about the true value of its investments in German real estate.

Deka said the executives knew back in April that real estate investments they were making in Germany were actually worth 512 million euros less than they said they were.

It said the executives, which ran real estate arm Deka Immobilien Investment, failed to communicate this vital information to either Deka’s management or its supervisory boards.

As a result, Deka said it had thrown out Willi Alda, Deka Immobilien Investment chief executive, Alda’s deputy Andreas Schreurs and controller Jochen Ackermann.

It added that Alda had been replaced by Rainer Mach, an executive at Deka’s Luxembourg arm.

This revelation of impropriety is the latest in a series of blows for the fund company. On 31 August, Deka dismissed Michael Koch, another Deka Immobilien Investment executive, for allegedly accepting a bribe. Koch is currently under criminal investigation.

Then in late September, Deka admitted that a fund investing in German real estate faced a liquidity crisis after losing 1.2 billion euros in investor capital during the first eight months of 2004.

Despite all this, Deka shareholders, Germany’s publicly-owned savings and regional banks have not called for the resignation of Axel Weber, Deka’s chief executive.

A regional bank source, who asked not to be named, said this was probably because little would be gained from such a move.

“Weber has to be given time to resolve the crisis at the real estate arm first before any additional steps can be expected,” the source said.

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