German lender Commerzbank AG must pay bonuses to 10 bankers who used to work for its now-defunct subsidiary in Singapore, according to a judicial ruling made public on Wednesday.
The bankers were former employees of Dresdner Bank, which has since shut down. They had claimed their employer breached their contracts by refusing to pay them $9.5 million in bonuses.
The employees had been induced to stay at the company because Dresdner's then-chief executive Stefan Jentzsch promised in August 2008 that the payments would be made in February of the next year.
Dresdner cut employee bonuses by 90 per cent in February 2009, following the global financial crisis and its acquisition by Commerzbank in January 2009. In response to the employees' suit, Commerzbank had disputed Jentzsch's authority to bind the bank to a contract.
But Singapore Judicial Commissioner Lionel Yee wrote in a 68-page ruling that he found Jentzsch to be "expressly authorised" to make the announcement, which was intended to be legally binding, Bloomberg said in a report on Wednesday.