Oct. 1 (Bloomberg) -- An Austrian regional court convicted former allies of the late Austrian politician Joerg Haider in a trail over kickbacks linked to the sale of Hypo Alpe-Adria-Bank International AG in 2007, Austria Press Agency reported, citing Judge Manfred Herrnhofer.
Former conservative politician Josef Martinz, who stepped down in July after saying he and Haider agreed to divvy up kickbacks, was sentenced to 5 and a half years of jail time, APA cited the jury at the Regional Court of Klagenfurt as saying. Tax consultant Dietrich Birnbacher, who confessed in court that his 6 million-euro ($7.7 million) fee was excessive, was sentenced to three years, while Hans-Joerg Megymorez and Gert Xander, who at the time led Carinthia’s holding company that paid the fee, were sentenced to three and to two years respectively, APA said.
Hypo Alpe, once owned by Haider’s Carinthia province, caused 3.7 billion euros of losses at BayernLB when Austria nationalized it in 2009. The lender, which expanded in the 2000s to become one of the biggest banks in the former Yugoslavia, has cost Austrian taxpayers at least 700 million euros since the nationalization. Austrian and German prosecutors have been investigating since 2009 how former managers and investors contributed to the losses.
BayernLB bought its initial 50 percent stake in Hypo Alpe for 1.63 billion euros from Carinthia, insurer Grazer Wechselseitige and a group of investors led by Tilo Berlin.
The verdicts are not final as Martinz, Megymorez and Xander said they will appeal, Kleine Zeitung newspaper said in its live blog from the court. Birnbacher’s lawyer asked for three days to consider whether to challenge the verdict, Kleine said.
The Klagenfurt court was investigating whether the fee paid by Carinthia’s state asset holding company to the tax consultant, Birnbacher, was appropriate. Birnbacher confessed in July that the fee, which had initially been 12 million euros and was halved after it became public in 2008, had been excessive.
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org