Telekom Austria Ex-Managers Given Jail for Share Manipulation
Stock Chart for Telekom Austria AG (TKA)
Telekom Austria AG’s (TKA) former finance chief and an ex-board member were found guilty of manipulating the share price in 2004 to trigger bonus payments for themselves and other employees. The two were sentenced to jail.
Former Chief Financial Officer Stefano Colombo was sentenced to 42 months in jail by a Vienna Criminal Court jury led by Judge Michael Tolstiuk. Rudolf Fischer, a former deputy chief executive officer, was given a three-year sentence. Another employee was given jail time, while former CEO Heinz Sundt was acquitted. Lawyers for Colombo and Fischer didn’t immediately say whether they plan to appeal.
“The court considers it proven that the jump of the share price caused the bonus payments,” Tolstiuk said. The accused “were aware that they were misusing their authorities,” he said. The three people found guilty were ordered to pay 9.9 million euros ($13 million) sought by the company as compensation.
The trial that began Feb. 11 was the first to result from multiple corruption probes into the Vienna-based company. About 40 people are being investigated because of payments Telekom Austria made to political parties and lobbyists, prosecutors said last fall. They are among a string of corruption cases over the last two years that involve politicians and state-controlled companies in the Alpine republic.
Colombo, Fischer and two other employees were found guilty of conspiring to provide company funds to a broker so that he could buy enough shares to drive the stock price above 11.70 euros on Feb. 26, 2004. That triggered 9 million euros ($11.8 million) of bonus payments for 95 employees, prosecutors said in the trial.
Fischer admitted during the trial that he approved a payment to the broker who bought Telekom Austria stock to lift the price. While Colombo repaid his bonus, he rejected all charges and said he hadn’t known some of the facts that surfaced in court. Sundt said he didn’t know about any manipulation.
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