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Mexico's InvestaBank has indicated that it is willing and able to move forward with its planned acquisition of Deutsche Bank subsidiaries in Mexico for an estimated US$150-200mn, despite an ongoing criminal investigation involving a major partner of the firm.
Court documents show that Carlos Djemal, a partner at Investabank owning 15% of the company, was arrested in Chicago late October on tax fraud and money laundering charges, along with five others in a scheme involving an estimated US$100mn.
The arrests came only days after Investabank announced it was working to acquire the Deutsche Bank assets. The German firm is working to free up capital through divestment to ease its own financial woes.
The arrests forced regulators, already reviewing the potential deal, to make a close examination of the Mexican firm's dealings with Djemal to determine any involvement in illegal practices. It also drove ratings agency S&P to place the firm under review.
According to media reports, Investabank is working with regulators to move forward with the Deutsche Bank transactions, which reportedly involve 100% of Deutsche Bank México and Deutsche Securities.
Last week, Investabank director Enrique Vilatela said in an interview: "We have verbal confirmation that everything is all good," adding that the firm had been meeting with inspectors who visited their offices after the arrests.
"We don't have the declaration in writing, but we have it verbally, which allows us to resume the bank's growth," he added. "The Deutsche Bank operation is moving forward, as is the increase in capital. We have now assembled the funding to assure that we move forward."
A report from local daily El Economista, however, suggests the investigation continues.
A spokesperson from Mexican bank regulator (CNBV) reportedly said that the inspection had not finished, saying, "we are still in the process of analysis ... there have yet to be even the smallest conclusions."
A representative from Mexico's savings protection agency (IPAB) told the newspaper their investigation was still ongoing.
Vilatela also said the firm is seeking the disincorporation of Djemal. "We are asking through his family that he sell his shares and exit the bank."
The bank, which only has a 0.06% share of the financial market in Mexico, could quintuple its stake with the purchase of Deutsche Bank's two assets in the country.
Going into the Investa deal, Deutsche Bank's Mexican companies faced issues with its debt rating. Moody's shifted its outlook to negative in December 2015 before reviewing it for downgrade, which it finally made in August.