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HGAA to launch compensation claims

Ailing Hypo Group Alpe Adria (HGAA) bosses have revealed plans to demand compensation from former bosses and political decision-makers.

HGAA chief Gottwald Kranebitter announced today (Fri) the bank would launch legal action against ex-chiefs "in the coming weeks". Kranebitter explained that it would focus on "those who caused damage to the bank".

The HGAA head declined to make clear whether former CEO Wolfgang Kulterer � who is currently in custody amid fears he might flee the country � was among those to be confronted with the compensation claims.

Kranebitter did not provide any names today, but experts said it was unlikely Kulterer would get away since he was suspected of having been responsible for massive losses due to negligent lending policies.

Kulterer�s lawyer Ferdinand Lanker branded the decision to take his client into custody "scandalous". The advocate said: "My client has become the victim of political arguments. The accusations against him are baseless."

The former HGAA chief faces fraud charges and is also accused of having been part of a "criminal organisation".

Newspapers are meanwhile speculating that 130,000 Euros in cash discovered in a casket in Kulterer�s office may be slush money.

Kranebitter said earlier this year that he wanted to make HGAA, which was nationalised in December 2009, profitable in a few years time and then resell it for a profit.

Figures for the first half of 2010 however show that the institute was far from being in the black. The former Carinthian provincial bank suffered net losses of 449 million Euros, it was announced today.

European Commission (EC) financial market experts gave the green light for continuation of support of HGAA with hundreds of millions of Euros in state aid

Kranebitter�s upbeat mood about getting the struggling bank back on track was tarnished by EC analysts� calling into question whether it would ever be profitable again, considering its debts and credit responsibilities.

People�s Party (�VP) Finance Minister Josef Pr�ll defended the government�s decision to nationalise HGAA by arguing that taxpayers would have had to cough up significantly more had it gone bust.

The minister promised to ensure that every single cent would be paid back and stressed he was convinced that prosecutors and investigators of the CSI Hypo and SoKo Hypo commissions � who are focusing on 40 suspects across Europe � would find out who had been responsible for the bank�s near collapse.

Germany�s BayernLB (Bayerische Landesbank) has so far suffered losses of around 3.7 billion Euros after taking over HGAA for 1.62 billion Euros three years ago.

Prosecutors in Klagenfurt, Vienna and Munich, Germany, are currently trying to work out whether then BayernLB leaders were aware of the crippled condition the bank was already in at that time � and who fooled them had they not been aware.

Investigations also focus on a group of 46 investors who made an alleged 150 million Euros profit by investing in the bank shortly before BayernLB�s takeover.

The Austrian government poured 450 million Euros into HGAA during its nationalisation last year, while BayernLB contributed 1.05 billion Euros to avoid bankruptcy. Other leading Austrian banks supported HGAA with around 500 million Euros to avoid a feared downturn of the Austrian financial market caused by a collapse of the institution.

Meanwhile, Austrian business media are claiming former HGAA officials and Carinthian politicians may have financed controversial real estate projects in Croatia and other Central and Eastern European (CEE) countries the bank was active in.

Austrian newspapers have claimed late Carinthian Alliance for the Future of Austria (BZ�) Governor J�rg Haider succeeded in asking BayernLB chiefs for financial support in building the Hypo Group Arena, Klagenfurt�s Euro2008 venue, when he met bank bosses for talks about a possible HGAA takeover.

Rumour also has it that Croatia�s military armament was backed with HGAA-owned money after ex-Croatian Deputy Defence Minister Vladimir Zagorec struck a deal with Austrian businessmen and politicians.

Croatian magazine Nacional reported recently that former Croatian Democratic Union (HDZ) Prime Minister Ivo Sanader was under investigation after accusations that he had pocketed huge sums in connection to Hypo Group Alpe Adria�s (HGAA) controversial lending activities in CEE. Sanader retired from politics last year, and local media have been speculating ever since that he had been involved in corrupt business deals.

Austrian Times

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billion lending Kulterer Kranebitter Croatia European politicians bank losses Carinthian compensation Minister Hypo financial BayernLB HGAA investigators Austrian Euros business

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