Proposed LSE-Deutsche Börse Carsten Kengeter chief ‘faced Libor claims’

The London Stock Exchange’s possible £20 billion tie-up with Deutsche Börse has taken a fresh twist after it emerged the German company’s boss had caught the attention of the UK’s Serious Fraud Office (SFO) when it investigated Libor rigging.

Deutsche chief executive Carsten Kengeter, who will lead the combined company if it merges, was temporarily included in a list of potential co-conspirators alongside convicted Libor fixer Tom Hayes, according to The Wall Street Journal.

The WSJ reported that Hayes had told SFO investigators that Kengeter had participated in meetings where plans to artificially “nudge” Libor up or down took place.

Kengeter was later removed from the SFO’s list, which was turned over to Hayes’ legal team in 2013, before the case went to trial last year. Kengeter is not accused of any wrongdoing.

The German worked at UBS between 2008 and 2012, latterly as co-head of its investment bank. Hayes was a lower-level trader at UBS between 2006 and 2009.

Hayes is currently serving an 11-year prison sentence after he was found guilty on eight fraud-related charges last year.

Deutsche Börse said: “All investigations conducted both internally at UBS and by independent third parties, as well as all investigations by the authorities, identified no reasonable grounds for accusing Mr Kengeter of any wrongdoing in the matter to which you refer. There is nothing new to add to this state of affairs.”

UBS declined to comment.

The revelation adds another frisson of tension to Deutsche Börse’s looming takeover of LSE, which is being closely watched by rival suitors in the US, who could yet enter with counterbids.

LSE shares are trading at an all-time high of 2,900p as investors await an announcement of the merger, which could come within the next few days.

Kengeter is set to lead the combined group, which will be headquartered in London, while LSE’s current boss Xavier Rolet will step down.