By John O’Donnell and Arno Schuetze
BERLIN/FRANKFURT (Reuters) – German lawmakers have criticised deputy finance minister Joerg Kukies and Goldman Sachs, alleging a conflict of interest in the U.S. investment bank advising state-backed Commerzbank on a possible merger with Deutsche Bank.
Kukies, who was formerly co-head of Goldman Sachs in Germany, left the Wall Street firm a year ago to become deputy German finance minister.
Kukies has since advocated a merger between Commerzbank and Deutsche Bank, which unions warn could mean up to 30,000 job cuts, people familiar with the matter say.
Goldman Sachs is advising Commerzbank on the $28 billion plus deal deliberations, people familiar with the matter said.
“It’s a conflict of interest,” Fabio De Masi, a prominent leftist lawmaker in the German parliament, said, pointing to the state’s 15 percent stake in Commerzbank.
Others echoed that complaint.
“To have Goldman Sachs advising Commerzbank, part owned by the state, on a merger a former partner in government is pushing for is incredibly insensitive,” said Florian Toncar, a lawmaker from the pro-business Free Democrats party. “This makes it look as if the deal was done by an old boys’ network.”
Toncar said he would “pursue this issue in parliament and ask how Goldman came to have the mandate.”
A spokesman for Kukies told Reuters there was no conflict of interest and that he had worked in the trading department at Goldman Sachs, which was “strictly separated” from bankers who advised on mergers.
Goldman Sachs declined to comment.
“In his 17 years at Goldman Sachs, Joerg Kukies exclusively worked for the sales and trading sector with no responsibility for the advisory/mergers and acquisitions section,” the spokesman for Kukies said.
Although confirmation of merger talks between Germany’s two largest banks, following months of speculation, has boosted their share prices, it has also triggered opposition and concerns over the impact on employment.
The issue is a highly emotive one in Germany and in its Tuesday edition, top-selling tabloid newspaper Bild raised a question mark over Kukie’s future in the government.
“When 30,000 jobs are on the line, the government must avoid the impression of a conflict of interest,” De Masi added.
This was echoed by Danyal Bayaz, a German parliamentarian and finance expert from the country’s Green party.
“In the financial crisis, we saw that government and finance were too interconnected. Ten years later, we don’t want to have the same. We want a strict separation from politics and industry,” Bayaz said.
“It is important to avoid the appearance of conflict of interest,” he added.
(Writing by John O’Donnell; Editing by Alexander Smith/Keith Weir)