By Dinesh Nair
DUBAI, Nov 18 (Reuters) - The regulator of Dubai's tax-freefinancial center has sued Deutsche Bank, claimingthat the German lender unlawfully refused to provide informationas part of an investigation into alleged breaches of its rules.
The filing is a rare step for the Dubai Financial ServicesAuthority (DFSA), and the first court action the regulator hasfiled in at least last three years.
Dubai International Financial Centre (DIFC) is home to manylarge global banks and asset management who were lured by theregion's oil wealth and fast economic growth.
The DFSA started its investigation in December last yearagainst the bank's wealth management division in Dubai overpotential breaches of due diligence and assessing clients formoney-laundering risks, the court documents, filed on Oct. 31but 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 thecourt filings.
Regulators around the world are investigating the role oflarge banks and brokers for their roles in cases ranging frommanipulation of global rates to mortgage-related practices.
Deutsche Bank set aside an extra 1.2 billion euros ($1.62billion) to cover potential litigation costs, almost wiping outits third quarter profit.
The DFSA sent a first notice to the German banking in Julyasking for information on wealth management client names,account opening dates, details of relationship managers and thelevel of due diligence performed by the bank, the courtdocuments showed.
It also asked for information on the bank's dealings withMunir Kaloti, chairman of Dubai-based Kaloti Group, a large goldrefiner and jeweller, according to the claim. The company didnot immediately respond to a request for comment by Reuters.
The regulator said in the court documents that the bankprovided some information on clients it booked in Singapore, butsaid there were 120 clients booked in Geneva for which noinformation was provided.
"It is to be inferred that Deutsche Bank possessed relevantmaterial within the DIFC but which it was refusing to disclosebecause of its analysis of Swiss law," the DFSA claim said.
The DFSA sent a subsequent notice in October asking forminutes of meetings between Deutsche Bank executives and otherdocuments related to its wealth management business. The claimsays Deutsche Bank responded by saying that the data requestedwas in Switzerland and could not be produced.
DFSA is claiming an injunction order requiring the bank toproduce the court documents and cover its costs.
Barclays (BARC)
