Nov. 20 (Bloomberg) -- Hypo Alpe-Adria-Bank International AG managers were aware that they misrepresented a tranche of preference shares as regulatory capital in 2006 and 2007, a defendant told a court today, the Austria Press Agency reported.
Josef Kircher, a former manager at the bank Austria had to nationalize in 2009, changed his plea and confessed to charges of misuse of funds and false accounting in a court in southern Austrian Klagenfurt, APA reported. The other accused former Hypo Alpe managers were also aware that the 100 million euros ($135 million) of preference shares were misrepresented and took actions to keep that secret, he said.
Kircher, Wolfgang Kulterer, Hypo Alpe’s former chief executive officer, and two others were charged with false accounting and misuse of funds by Austrian prosecutors because they gave investors an option to sell the securities back to Hypo Alpe. That option disqualified them from being counted as regulatory capital, and also meant that Hypo Alpe paid dividends that were too high, prosecutors said.
Richard Soyer, Kircher’s lawyer, didn’t immediately return a call to his firm. Kulterer’s lawyer, Dieter Boehmdorfer, said in a telephone interview that his view is that the shares were legitimate regulatory capital and Kircher’s statement didn’t change anything.
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