Ex-Hypo Alpe Managers Charged With False Accounting, Misuse
Austria charged former managers of Hypo Alpe-Adria-Bank International AG as well as the estate of the late German industrialist Friedrich Karl Flick today over the sale of shares in a subsidiary of the bank in 2007.
Prosecutors in the southern province of Carinthia, where Hypo Alpe is based, charged the former executives with falsifying accounts because they misrepresented the shares as core capital, the prosecutors’ spokesman Helmut Jamnig said by phone from Klagenfurt today. They also abused their authority to manage the bank’s funds in the deal, causing damages of as much as 8 million euros ($10.4 million), Jamnig said.
“You mustn’t circumvent rules for minimum capital ratios by generating capital that you don’t have, because that means the whole business is running a higher risk,” Jamnig said about the charges against the managers. He declined to identify them.
Flick Privatstiftung said in a statement that it was cooperating with the authorities and would repay any “unlawful advantage” it may have gained in the transaction. It added that it considered the transaction to have been a “normal” investment that yielded a “risk-adequate return.”
The charge is one of several brought by the Austrian authorities, which are seeking those responsible for billions of euros of losses Hypo Alpe caused former owners including Germany’s Bayerische Landesbank as well as Austrian taxpayers. Hypo Alpe was nationalized three years ago after BayernLB and its co-shareholders, Austrian insurer Grazer Wechselseitige and the Carinthia province, withdrew support.
Wolfgang Kulterer, a former Hypo Alpe Chief Executive Officer, was found guilty and sentenced to prison this May in a similar share sale that took place two years earlier.
Ferdinand Lanker, Kulterer’s lawyer, denied that his client was responsible for any wrongdoing linked to the transaction.
To contact the reporter on this story: Boris Groendahl in Vienna at email@example.com
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org