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Former Hypo Alpe CEO Kulterer Arrested in Austria

Aug. 13 (Bloomberg) -- Hypo Alpe-Adria Bank International AG’s former Chief Executive Officer Wolfgang Kulterer was arrested today in Klagenfurt, Austria.

Kulterer is being investigated for breach of trust and giving false testimony to an enquiry commission in the Province of Carinthia, Helmut Jamnig, a spokesman for the Klagenfurt prosecutor, said in a telephone interview. He was arrested because of “danger of flight, danger of collusion and danger of repeat offenses,” Jamnig said.

In addition to Kulterer, another person was arrested and ten locations in Carinthia and Vienna were raided, Jamnig said. Calls and an e-mail to Kulterer’s lawyer Ferdinand Lanker weren’t returned.

Hypo Alpe was nationalized in December. Kulterer, 56, led the bank’s eastern European expansion from 1992 until he left day-to-day operations in 2006, when he pleaded guilty to accounting fraud for failing to write down 288 million euros ($369 million) in currency-trading losses.

The former CEO has been selling off Carinthian property, including a 19-stable horse farm in the southern Austrian province, according to local media reports. Kulterer has been living in England, where he works as an investment banker, the reports said.

Kulterer conducted business with Carinthian Governor Joerg Haider, who died in a 2008 car crash. The province owned a majority stake in Hypo Alpe until selling shares to Bayerische Landesbank in the wake of bank losses. The sale has since been probed by prosecutors in Germany and Austria. Kulterer and Haider were criticized by Austrian officials in 2000 after visiting Libyan dictator Muammar Qaddafi to develop business links.

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Zoe Schneeweiss at zschneeweiss@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net; Angela Cullen at acullen8@bloomberg.net

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