FRANKFURT (Reuters) – Europe’s top banking regulator, the European Central Bank (ECB), is considering carrying out a review of Deutsche Bank’s (DBKGn.DE) two largest shareholders, a regulatory source said on Monday.
The ECB may launch so-called ownership-control procedures to scrutinize both Qatar’s royal family and China’s HNA (0521.HK), which each owns just under 10 percent of the shares of Germany’s flagship lender.
“That the ECB is investigating or considering to investigate the shareholdings is indeed accurate,” said the person, speaking on condition of anonymity because the person was not authorized to speak publicly about a review that is ongoing.
News of the possible review was first reported by the Sueddeutsche Zeitung on Sunday.
The ECB, Deutsche Bank, and HNA have declined to comment.
The aim of such an assessment is to establish whether an investor is trustworthy and financially sound, where the money used for the investment came from, and whether the investor engages in any criminal dealings such as money-laundering or financing of terrorism.
“The approval process aims to ensure that only suitable shareholders enter the banking system in order to prevent any disruptions to the smooth functioning of the banking system,” the ECB’s website says.
Normally, the review takes place once a holding reaches 10 percent of shares or voting rights. But it also may take place if there is “significant influence over the management of the bank”, the ECB’s website says.
Qatar, which has been a Deutsche Bank shareholder since 2014, and HNA, which acquired its stake this year, have each been granted a Deutsche Bank board seat.
A negative outcome of the review could result in the ECB prohibiting the shareholder from exercising its voting rights.
Reporting by Arno Schuetze, Balazs Koranyi, Alexander Huebner, Frank Siebelt, Tom Sims; Additional reporting by Matthew Miller in Beijing; Editing by Edward Taylor, Rachel Armstrong and Georgina Prodhan