Gardaí raid offices in bank probe

GERMAN prosecutors and police officers have raided houses and offices of five former management board members at Landesbank Sachsen in Germany and Dublin in recent days.

This is part of an ongoing investigation into the near collapse of the state-owned bank after subprime-related losses.

Those former key members of staff in the bank are suspected of improper use of funds and false accounting in annual reports, Leipzig prosecutors and federal police said.

Five former board members are being investigated for accounting malpractice and breach of trust.

The bank investigators searched 28 sites including houses and offices in six German states and in Dublin, and collected computers, electronic data and business documents as part of the probe.

A Garda spokesman confirmed they were asked to carry out raids on offices in Dublin’s city centre which may have been involved in illegal activity.

Last October prosecutors initiated an investigation after it emerged Sachsen received a €17.3 billion credit bailout for its Dublin-based unit that had bought US subprime debt and ran out of funding.

Landesbank Baden- Wuerttemberg, Germany’s biggest state lender, agreed to buy the bank after the German financial regulator BaFin threatened to shut it down.

The former board members are suspected of “placing the existence of the bank in jeopardy” by “significantly” expanding investments in off-balance-sheet vehicles in Dublin.

Sachsen was Germany’s second victim of the US subprime collapse.