Harmful investments by Deutsche Bank June 2009
Loans In August 2006, CNPC, the controlling shareholder of PetroChina, acquierd a 67% share in PetroKazakhstan, after this acquisition was postponed because of political turmoil. Deutsche Bank advised CNPC on the deal. In February 2007, Deutsche Bank participated in e € 767 ten-year loan to CNPC, for an amount of € 23 million, to fund CNPC’s further investments in PetroKazachstan. The Chinese oil company Petrochina operates the majority of Sudan’s oil industry and is also active in Burma. Sudan and Burma are highly reliant on foreign direct investment to fund its military and finance internal repression. In July 2005, Deutsche Bank participated for a sum of € 85 million in a € 3 billion revolving credit to EADS. In March 2008, AirTanker (40% owned by EADS) signed a deal with the UK Ministry of Defenceand to provide an advanced air-toair refuelling and air transport capability to the Royal Air Force. Advisor of AirTanker in this deal is Deutsche Bank. EADS, the second largest European arms producer, is involved in the production of nuclear weapons. In July 2006, Deutsche Bank participated for an amount of € 20 million in a € 336.1 million revolving credit to Freeport McMoran and PT Freeport Indonesia, its operating unit in Indonesia. Freeport releases 230,000 tonnes of polluted rubble into the local river system each day. Opponents of the mine are treated harshly by the military forces bribed by the company. The HidroAysén hydropower project is a joint venture between the Chilean companies Colbún and Endesa Chila. At the end of 2008, Endesa Chile had longterm debt of € 39 million outstanding with Deutsche Bank. The HydroAysén project plans to construct 5 hydroelectric centers with dams which will displace families, threaten critically endangered species and disrupt sustainable income to Patagonia’s local communities. In June 2006, Deutsche Bank participated for an amount of € 86 million in a € 1.42 billion revolving credit to Suncor Energy. In March 2008, this was replaced by a € 2.26 billion revolving credit, in which Deutsche Bank participated for a sum of € 162 million. Suncor Energy is one of the largest companies in the Canadian tar sands industry. Oil extracted from tar sands has a disastrous impact on the environment. In March 2005, Deutsche Bank participated for a sum of US$ 100 million in a US$ 1.25 billion five year revolving credit to Textron. In April 2006 and April 2007, the revolving credit was amended. Deutsche Bank participated for US$ 90 million in both amended credits. In April 2006, Deutsche Bank participated for a sum of US$ 130 million in a US$ 1.75 billion credit to Textron Financial
Corporation, a wholly owned subsidiary of Textron Inc. In April 2007, Deutsche Bank participated for an amount of US$ 130 million in amending this credit. Textron produces cluster munitions.
Issuing of shares In September 2005 Deutsche Bank arranged the issue of shares for PetroChina worth a total of € 1.9 billion. In December 2005, Deutsche Bank arranged the issue of shares for Dongfeng Motor for a total amount of € 439 million. Deutsche Bank underwrote this issue for € 52 million. In July 2006, Deutsche Bank led a placement of 100 million shares in Dongfeng Motor, which raised € 35.8 million. One of Dongfeng’s subsidiaries “DFL” strenghthens the brutal dictatorship in Burma by supplying military trucks. In April 2007, Deutsche Bank launched the Initial Public Offering of a total of 105 million shares, planned by Lundin Petroleum’s subsidiary Viking Oil and Gas. The IPO was cancelled due to insufficient interest in the IPO. Lundin is classified by the Sudan Divestment Task Force (SDTF) as “Highest Offender”, for its direct support to the Sudanese government. The Sudanese government is accused of continued ethnic cleansing in Darfur. In April 2009, Textron issued shares for an amount of US$ 217.4 million. Deutsche Bank underwrote this issue for a sum of US$ 7.7 million.
Issuing of bonds In September 2005, EADS launched a € 3 billion Euro Medium Term Note (EMTN) Programme, replacing the € 3 billion EMTN from February 2003. The programme enables the company to issue bonds on the European capital market on a regular basis and without too many regulatory requirements. Deutsche Bank is one of the selected dealers for this programme. In June 2007, Deutsche Bank managed the issuing of bonds for Suncor Energy worth € 557.2 million. Deutsche Bank underwrote this issue for € 78 million. In September 2007 and June 2008, Deutsche Bank underwrote another two issues of bonds, for € 12.9 million and € 45 million respectively. Between November 2007 and April 2009, Deutsche Bank underwrote six series of bonds for Textron, worth US$ 400 million, US$ 350 million, US$ 100 million, US$ 25 million, US$ 300 million and US$ 540 million. Deutsche Bank underwrote these issues for US$ 133 million, US$ 12.32 million, US$ 100 million, US$ 25 million, US$ 100 million and US$ 14.625 million respectively.
Deutsche Bank is selected as a dealer for Total’s European medium-term programme. Thanks to this programme, the company can regularly and easily issue bonds on the European market. In May 2006 and in September 2006, Deutsche Bank was lead manager of the bond issuing of Total Capital (the financing subsidiary of Total) worth € 129 million and € 42 million. Deutsche Bank underwrote these issues for € 42 million and € 21 million respectively. Between June 2008 and April 2009, Deutsche Bank underwrote another three bond issues for € 6 million, € 9 million and € 5 million respectively. Total is involved in gas extraction which supports the Burmese junta. The laying of the pipeline and the surrounding infrastructure led to serious human rights abuses. In October 2005, Vedanta Resources mandated Deutsche Bank for a US$ 500 to 1,000 million bond issuance. This bond issuance was never realised. In July 2008, Deutsche Bank acted as a joint book runner for the issuing of bonds of Vedanta Resources worth € 803 million, for an amount of € 80 million. The Indian mining company Vedanta has illegally driven indigenous people from their land in India. The company has dumped toxic waste in India and Zambia. In April 2007 and January 2009, Deutsche Bank arranged two issues of bonds for Wal-Mart, worth € 1.7 billion and € 770 million. Deutsche Bank underwrote these issues for € 337.2 million and € 150.2 million respectively. Between August 2005 and April 2008, Deutsche Bank underwrote another three issues for € 122.6 million, € 119.1 million and € 26.1 million respectively. The US supermarket chain Wal-Mart censors trade union information, sacks members of trade unions, and even closes entire stores to block the unionisation of the workforce.
Shareholdings Deutsche Bank owns or manages shares in ten of the researched companies, for a total value of US$ 2085,15 million.
Sources: European banks financing controversial companies, Profundo (research paper for Netwerk Vlaanderen), June 2009 ; Shareholdings of some European Banks in controversial companies, Profundo (research paper for Netwerk Vlaanderen), June 2009.