WestLB revealed today that it had built a 14 per cent stake in DaimlerChrysler, only a week after it dismissed two of its directors for making a €100 million loss trading Volkswagen shares.

The German bank said that the stake in the German carmaker was temporary and would be reduced to less than 3 per cent by the end of the month.

Details of the stake come as DaimlerChrysler pursues the possibility of selling off its Chrysler cars business.

A sale would probably result in a special dividend for shareholders and leave the group focused on its non-Chrysler brands.

The bank said that it had amassed the stake as a “service for a third party” in its role as market-maker for Daimler shares on the Eurex derivatives exchange.

DaimlerChrysler said that the bank had informed it that the transactions were completely hedged with futures.

WestLB parted company last week with Friedhelm Breuers, the head of equity markets, and another unnamed banker, after they breached risk limits while gambling the bank’s money on equities, including Volkswagen stock.

The bank said that the size of its stake in DaimlerChrysler became apparent after it contacted Bafin, the German financial regulator, in connection with the Volkswagen trading incident.

A spokesman said that the discrepancy was due to a new law that changes the way holdings are calculated and includes areas, such as market-making, which were previously excluded.

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