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By Tom Sims and Marta Orosz
FRANKFURT (Reuters) - Union Investment, a large shareholder in Deutsche Bank's fund arm DWS, told Reuters it would vote against DWS' management and supervisory board at Thursday's annual general meeting, in a sign of frustration over allegations of greenwashing.
The shareholder meeting comes a week after the chief executive of DWS said he would step down following raids by prosecutors over the allegations that the fund misled investors over its green credentials.
The largely symbolic move from a minority stakeholder underscores the loss of confidence in parent Deutsche Bank, which controls and oversees the fund manager with its nearly 80% stake.
The Association of Ethical Shareholders and climate activists also called on investors to vote against management and the supervisory board.
The raids and departure of DWS CEO Asoka Woehrmann mark another setback for Deutsche Bank, which has been trying to move on from regulatory breaches, including money laundering and securities mis-selling that resulted in billions in fines.
DWS has repeatedly denied it misled investors, and both DWS and Deutsche have said they are cooperating with regulators and authorities.
Woehrmann's successor Stephan Hoops, who assumes the CEO role later on Thursday, told shareholders that restoring confidence in DWS was a "top priority" for him.
Union Investment is DWS' third-largest shareholder, with a 1.16% stake, according to Refinitiv data.
DWS and Deutsche Bank declined to comment on Union Investment's stance.
At Thursday's investor meeting, Woehrmann stressed to shareholders that 2021 revenues grew 22% and net profit 40%, according to prepared remarks.
Karl von Rohr, chair of the DWS supervisory board and Deutsche Bank's co-deputy CEO, praised Woehrmann and assured shareholders that "we will take decisive action if misconduct is proven here or elsewhere," but called for a "presumption of innocence".
GRAPHIC: DWS shares (https://graphics.reuters.com/DWS-AGM/zjvqkgbjwvx/chart.png)
DWS shares are down more than 20% since allegations emerged in August. Shares of some competitors have also dropped during that period, but Woehrmann called the share price "frustrating".
Last year, the U.S. Securities and Exchange Commission and German financial watchdog BaFin launched separate investigations into the whistleblower allegations that DWS marketed its funds as greener than they were.
Last week, German prosecutors said that "sufficient factual evidence has emerged" to show that sustainable factors were taken into account in a minority of investments "but were not taken into account at all in a large number of investments," contrary to statements in DWS fund sales prospectuses.
(Reporting by Tom Sims and Marta Orosz, Editing by Miranda Murray and Elaine Hardcastle)