Dubai regulator sues Deutsche Bank over disclosure denial

By Dinesh Nair

DUBAI (Reuters) - The regulator of Dubai's tax-free financial centre has sued Deutsche Bank , claiming that the German lender unlawfully refused to provide information as part of an investigation into alleged breaches of its rules.

The filing is a rare step for the Dubai Financial Services Authority (DFSA), and the first court action the regulator has filed in at least last three years.

Dubai International Financial Centre (DIFC) is home to many large global banks and asset management who were lured by the region's oil wealth and fast economic growth.

The DFSA started its investigation in December last year against the bank's wealth management division in Dubai over potential breaches of due diligence and assessing clients for money-laundering risks, the court documents, filed on October 31 but made public on Sunday, showed.

A spokesman for Germany's largest bank declined to comment, while the DFSA declined to provide more details aside from the court filings.

Regulators around the world are investigating the role of large banks and brokers for their roles in cases ranging from manipulation of global rates to mortgage-related practices.

Deutsche Bank set aside an extra 1.2 billion euros ($1.62 billion) to cover potential litigation costs, almost wiping out its third quarter profit.

The DFSA sent a first notice to the German banking in July asking for information on wealth management client names, account opening dates, details of relationship managers and the level of due diligence performed by the bank, the court documents showed.

It also asked for information on the bank's dealings with Munir Kaloti, chairman of Dubai-based Kaloti Group, a large gold refiner and jeweller, according to the claim. The company did not immediately respond to a request for comment by Reuters.

The regulator said in the court documents that the bank provided some information on clients it booked in Singapore, but said there were 120 clients booked in Geneva for which no information was provided.

"It is to be inferred that Deutsche Bank possessed relevant material within the DIFC but which it was refusing to disclose because of its analysis of Swiss law," the DFSA claim said.

The DFSA sent a subsequent notice in October asking for minutes of meetings between Deutsche Bank executives and other documents related to its wealth management business. The claim says Deutsche Bank responded by saying that the data requested was in Switzerland and could not be produced.

DFSA is claiming an injunction order requiring the bank to produce the court documents and cover its costs.

(Reporting by Dinesh Nair; Editing by Louise Heavens)

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