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'No collusion' by D Börse rebels
Patrick Jenkins, FT Syndication Service

FRANKFURT: German regulators let reluctantly Deutsche Börse's activist investors off the hook recently, after a six-month inquiry into whether they had "acted in concert" when they overturned the strategy of the stock exchange group and ousted its directors in May.
In an unusually equivocal statement, BaFin, Germany's chief financial regulator, said it had not been able to establish "conclusively" that London-based hedge fund TCI and other investors, including mainstream funds such as Fidelity and Merrill Lynch Investment Managers, had colluded in their rebellion against the strategy of Werner Seifert, the former Deutsche Börse chief executive.
"The indications we have do not justify without some doubt the assumption that the funds in question had a far-reaching plan for what they wanted to do with Deutsche Börse," BaFin said.
Mr Seifert had announced his planned takeover of the London Stock Exchange (LSE) late last year. But between December and March, activist investors came to dominate the Börse's shareholder base. They first forced a withdrawal of the LSE offer, then demanded a return of excess capital and finally ousted Mr Seifert and his supervisory board chairman, Rolf Breuer.
The affair triggered outrage and fear across corporate Germany and prompted Franz MiInterfering, chairman of the ruling SPD, to label hedge funds and other financial investors "locusts" intent on stripping Germany of its best assets.
Independently, BaFin had begun its inquiry into suspicions that some of the investors had colluded to achieve their aims. In May, Jochen Sanio, BaFin's president, said initial inquiries had "come up positive" and that a second-stage probe would begin immediately.
People close to the Börse said the group had passed to BaFin "about a dozen" letters and financial calculations it had been sent separately by shareholders but which were all strikingly similar in content. These constituted "circumstantial evidence" of a concert party, said one.
Recently, Mr Sanio said: "We examined the case because we had indications that the fund companies had discussed among themselves how to control Deutsche Börse. From the statements of those involved, however, it was not sufficiently certain that the fund companies had acted together against the executive and supervisory boards."
BaFin has always refused to say how many investors were implicated. But Deutsche Börse and its advisers believe that about 30 shareholders, controlled as 60 per cent of the shares, were behind the rebellion.
TCI and other funds involved in the rebellion declined to comment.