March 29 (Bloomberg) -- Wolfgang Kulterer, Hypo Alpe-Adria-Bank International AG’s former chief executive officer, didn’t misuse bank funds, an Austrian court ruled, dealing a blow to government prosecutors seeking those responsible for the bank’s near-collapse in 2009.
Kulterer and two other Hypo Alpe executives didn’t intentionally misuse the lender’s funds when they granted loans including a 2 million-euro ($2.8 million) credit to Styrian Airways AG, a regional carrier which later went bankrupt, the court ruled, according to court spokesman Christian Liebhauser-Karl. He said prosecutors already appealed the ruling.
Austria agreed at the end of 2009 to nationalize Hypo Alpe to avert the bank’s collapse after bad debts piled up and majority owner Bayerische Landesbank pulled its support. Finance Minister Josef Proell installed a task force of lawyers, police, prosecutors and central bank auditors to find out who was responsible for the losses that forced the nationalization. The acquittal of Kulterer and the two other managers is the first court ruling on a criminal case brought by the group.
When Kulterer was in charge, the bank was controlled by the southern Austrian province of Carinthia, governed by the late populist politician Joerg Haider. Haider had requested the loans that were probed in the court case, Kulterer said in court.
Carinthia sold a majority stake in Hypo Alpe to BayernLB in 2007. The investment in Hypo led to writedowns at BayernLB of about 3.7 billion euros. Prosecutors in Germany are still investigating allegations that former managers at both Hypo Alpe and BayernLB may have duped the Bavarian bank into the purchase of its stake.
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