CEO of new Stagecoach owner DWS resigns

The CEO of German asset manager DWS, which recently agreed a deal to buy Perth-based transport giant Stagecoach, has decided to resign after raids by prosecutors over allegations that DWS misled investors about “green” investments.

DWS CEO Asoka Woehrmann said in a statement: ” … the allegations made against DWS and myself in past months have become a burden for the company, as well as for my family and me.

“In order to protect the institution and those closest to me, I would like to clear the way for a fresh start.”

Woehrmann has been under pressure on multiple fronts since allegations of  “greenwashing” broke.

Woehrmann will resign at the end of the DWS AGM on June 9.

Stefan Hoops, previously head of the corporate bank at Deutsche Bank, will become the new DWS CEO.

DWS, a standalone unit of Deutsche Bank, said on May 20 it won control of Stagecoach as its £595 million cash takeover bid was declared unconditional, beating a proposed all-share rival deal from National Express.

Reuters cited German prosecutors saying that “sufficient factual evidence has emerged” to show that ESG factors were taken into account in a minority of DWS investments “but were not taken into account at all in a large number of investments”, contrary to statements in DWS fund sales prospectuses.

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

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.”

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

Magdalena Senn of the German consumer advocacy group Finanzwende told Reuters the accusations show “greenwashing is not a trivial offence.”

Senn added: “The raid and the resignation will have a signal effect for other asset managers.”

A fund managed by DWS Infrastructure announced in March it agreed to pay £1.05 in cash for each Stagecoach share — a premium of 54.3% to the Scottish firm’s closing price of 68.05p on September 20, 2021, the last business day before the National Express possible offer announcement, and a premium of 37.2% to the closing price of 76.55p on March 8, 2022.

DWS said in March it would retain Stagecoach’s current chief executive Martin Griffiths as well as its finance director and UK Managing Director and “… for employees, it will provide greater certainty over the future, with overall headcount in frontline operational roles expected to remain the same, as well as the retention of Stagecoach‘s existing headquarter functions and related roles in Perth, London and Stockport.”