October 13, 2017 / 10:59 AM / 9 months ago

Deutsche Boerse CEO discussed merger with FinMin before share purchase - report

FRANKFURT, Oct 13 (Reuters) - The head of Deutsche Boerse met with the German government to discuss a possible merger with London Stock Exchange before he made a share purchase that sparked an insider trading investigation, according to a magazine report.

CEO Carsten Kengeter purchased 4.5 million euros in Deutsche Boerse shares in mid-December of 2015, two months before the announcement of merger talks that resulted in a sharp rise in the share price. Kengeter has denied insider trading and said the purchase was part of an executive compensation program.

Linklaters, Deutsche Boerse’s external counsel, found CEO Carsten Kengeter met with German Finance Minister Wolfgang Schaeuble on Sept. 1 and Nov. 3, 2015, the German weekly WirtschaftsWoche reported on Friday.

On Oct. 30 of that year, the exchange operator sent Schaeuble and his staff a six-page confidential note “on the preparation for a coordination with the German finance ministry on a possible merger with the LSE,” the magazine said, citing the Linklaters review.

A spokesman for Deutsche Boerse declined to comment on the WirtschaftsWoche report but quoted the summary of the Linklater review: “In our opinion, insider information was not available on the date of the acquisition of the share purchase by Mr. Kengeter on Dec. 14, 2015, up until Jan. 19, 2016.”

A spokesman for the German Finance Ministry declined to comment. Linklaters didn’t immediately respond to a request for comment.

Deutsche Boerse last month agreed to pay 10.5 million euros of fines to try to draw a line under allegations of insider trading, but the settlement is still pending approval in a Frankfurt court. As part of the agreement, Kengeter would pay an additional 500,000 euros personally.

Despite the fines, Deutsche Boerse and Kengeter have maintained their long-held position that the allegations of insider trading were unfounded.

Kengeter’s contract is set to expire at the end of March. (Reporting by Tom Sims and Hans Seidenstuecker; Additional reporting by Tom Koerkemeier in Berlin; Editing by Elaine Hardcastle)

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