Volksbank Köln Bonn and board member Jürgen Neutgens agreed to end his tenure after an external review of a loan connected to Cologne's Pascha brothel. The bank said the review found no financial irregularities or misconduct in the transactions examined and no evidence that Neutgens personally benefited. It nevertheless concluded that the basis for trust and impartial cooperation could not be maintained.
The case concerns a €5 million loan granted in 2021 to finance the purchase of the 12-storey property housing Pascha after the venue entered insolvency during pandemic restrictions, Reuters reported. The cooperative bank placed Neutgens on leave during the summer and commissioned an independent law firm to examine the matter. A separate investigation by Cologne prosecutors remains open, while Neutgens has denied wrongdoing and his lawyer expects him to be cleared.
REVIEW CLEARED THE LENDING PROCESS
Volksbank's original July announcement said the special review would examine the lending relationship and any possible personal benefit involving a board member. It also stressed that the presumption of innocence applied and that the bank remained operational under its other board members. The lender pledged to publish information after the review was completed.
Regional newspaper Kölner Stadt-Anzeiger separately reported the mutual agreement ending Neutgens' board role and cited the bank's short statement. Its account also said the external report cleared the executive, while noting that the prosecutorial inquiry continued. Reuters reported that prosecutors had requested the bank's review for their own examination.
LEGAL SCRUTINY REMAINS OPEN
The personnel decision therefore does not amount to a finding of wrongdoing. The external review addressed the bank's lending process, whereas prosecutors are conducting a separate inquiry and have not announced a final determination. BaFin has also questioned the bank about the financing, according to Reuters.
The next material milestone will be a decision from prosecutors or any further supervisory action. Until then, the bank's review and the criminal inquiry must remain distinct in reporting. Volksbank Köln Bonn must also determine how the vacated board responsibilities will be reassigned or permanently filled.