Juerg Zeltner achieved at KBL what he wanted most – being an entrepreneur. It also seems to have cost him his seat on the supervisory board of Deutsche Bank.

The ex-UBS manager didn’t last long as a member of the Deutsche Bank board: After only two months, Juerg Zeltner, chief executive of KBL banking group in Luxembourg, will step down at Deutsche, according to a report by «Der Spiegel».

Sources close to Zeltner confirmed his step to finews.com, while both the bank and Zeltner haven’t yet made a public statement on the case.

Regulatory Power Play

The decision followed an almost unprecedented power play by regulators. Media reports mentioned that both the German financial market regulator (BaFin) and the European Central Bank (ECB) had threatened to veto Zeltner’s continued presence on the board of Germany’s largest bank. The reason they seem to have given for their response was a potential conflict of interest due to the manager’s appointment as top executive of KBL.

It seems ironic that the step from manager to entrepreneur, something that he appeared proud of, would have cost him his board membership at Deutsche.

Valuable Know-How

Qatar’s rulers, the al-Thani family, installed him on the board of Deutsche Bank to represent their interests – they own 6 percent of the lender. The al-Thani family also owns KBL. Zeltner agreed to take a seat on the board at Deutsche in August. It appeared that his know-how as a private banker helped him get the post because the bank aims to expand its wealth management.

Deutsche Bank and its Chairman Paul Achleitner thought the conflicts of interest to be minor and that the issue would disappear given that Zeltner was a non-independent member of the board. Now it looks as if the Qataris want their revenge by getting rid of Achleitner, «Der Spiegel» reported.

Worrying Accumulation of Power

German banks don’t need regulatory approval for board member appointments, but the power of the Qataris, personified as it is through Zeltner, seems to have aroused suspicions among regulators.

The ECB is said to have referred to an article in its guidelines for suitable board members which stipulates that leading positions and financial interests at rival firms constitute a potentially significant conflict of interest, Germany’s «Handelsblatt» said.

Balance of Power in Negotiations

Zeltner’s financial interests at KBL was the key to why regulators kicked up a fuss. He participates in the profit of KBL because of his investments, even as the company is fully owned by the Qataris.

Zeltner had told finews.com that a dream had come true with his engagement as an entrepreneur at KBL. The position altered the dynamic in his negotiations with rich business clients, a clientele sought after by KBL.

Worries at the Crown Jewel

His job at KBL will keep him busy in any case, because Merck Finck's private bank, the crown jewel among the group’s banks, had suffered a setback in 2018. The firm had a loss of 10 million euros.