UPDATE: Deutsche Bank: Ackermann Won't Head Supervisory Board; Proposes Allianz CFO

Germany's Deutsche Bank AG (DB, DBK.XE) said Monday that the bank's Chief Executive Josef Ackermann won't take over as chairman of the supervisory board when he steps down in May, and it is proposing Allianz SE (ALV.XE, AZSEY) financial chief Paul Achleitner for the position instead.

Citing "extremely challenging" conditions on the international financial markets and in the political-regulatory environment," Ackermann said he must focus on his tasks as CEO right now, according to a statement from the bank. This means he can't spend time seeking the support of shareholders for his bid to be supervisory board chairman.

Supervisory board candidates need the support of 25% of the shareholders to be elected.

A person familiar with the matter told Dow Jones Newswires, that Ackermann didn't have the time do the necessary lobbying and couldn't win their backing. Another person familiar with the matter said: "It became obvious that Ackermann couldn't secure this."

Ackermann's withdrawal coincides with news that German prosecutors have searched the offices of Deutsche Bank executives and former executives, including Ackermann himself, following allegations that they gave false testimony in a trial brought against the bank by late German media mogul Leo Kirch.

This investigation hasn't helped Ackermann's supervisory board ambitions, the second person added. As the bank's top supervisor, it would mean Ackermann would have to lead investigations into his own actions as a former CEO.

Separately, Allianz said its financial chief Paul Achleitner has told Deutsche Bank he is available for the supervisory board post.

Achleitner will leave the insurer's executive board at the end of May, should Allianz's supervisory board release him from his contractual obligations. An Allianz spokesman declined to comment further.

Allianz Chief Executive Michael Diekmann said in a memo to staff, seen by Dow Jones Newswires, that Achleitner's departure would be a great loss to the company but also recognition of Achleitner's "extraordinary contribution to the success of Allianz in the last decade."

-By Eyk Henning, Ulrike Dauer and Laura Stevens, Dow Jones Newswires, [phone]; [e-mail]