WestLB had a touch of egg on its face on Thursday as it was forced to admit it had inadvertently amassed 14% in German carmaker DaimlerChrysler.
Two people familiar with the transaction told the FT that the same suspected rogue traders who were fired by WestLB after taking large positions in fellow carmaker Volkswagen that breached internal rules on risk, were involved in the Daimler purchase.
WestLB said it had hedged all its exposure and would sell its stake to below 3 per cent by the end of the month. “There will be no speculation profit or loss - the net exposure is nil,” a spokesman said. He confirmed that the same traders fired over the VW allegations “could have been involved” but that “the context was totally different. It had nothing to do with the investigations. It was about combining stakes held by different parts of the bank.”
DaimlerChrysler is currently auctioning off its US Chrysler unit, with a wealth of trade players and private equity houses interested. Names linked include Magna, Blackstone, Tracinda and Cerberus.
