Archive for November 2, 2010

Hypo-Alpe-Adria-Bank (Scandalpe)

Hypo-Alpe-Adria-Bank (Scandalpe): Update of the Scandal

Dr. Alexander von Paleske — In 2007 we published a comprehensive report about the Austrian Scandal-Bank Hypo Alpe Adria (Scandalpe).

What happened since
Since the last report quite a bit of development has taken place, that, as we do believe, is worth while reporting.

Meanwhile the ownership of the Scandal-bank is back home in Austria, the former CEO in prison,apparently plenty shady deals have surfaced, allegedly taken place before and during the German ownership, the now former owner, the BayernLB has been herself hard hit by the World Financial Crisis and accumulated more than 15 billion Euro in debts, that had to be settled with taxpayers money, and, as a consequence, forced the German State of Bavaria to cut its subsidies to the institutions of higher education (i.e. universities).

Let’s have a closer look
After the majority of shares of Hypo-Alpe were taken over by the BayernLB, for 1.6 billion Euro in May 2007, another 2,1 billion Euro were pumped into the Austrian bank by the Bavarian parastatal, with the intention, to make it more viable.

However these injections did not make the „lame duck” run. To the contrary, basically the bank turned out to be a bottomless pit with no end in sight.

Finally, after 2 1/2 years of unhappy, stressful and expensive ownership, the BayernLB got rid of its daughter by selling it back to Austria , this time to the government of Austria – for a symbolic 1 Euro, thus incurring a total loss of 3,7 Billion Euro.

However another 3,1 billion Euro worth of loans from the BayernLB are still to be paid back by the Hypo-Alpe, from 2013 onwards, provided they can pay……Otherwise the losses of the BayernLB will shoot up to 6.7 billion Euro..

After this relatively „cheap“ acquisition, the government of Austria had, not surprisingly, to pump more money into the bank, this time to the tune of 900 million Euro in order to keep it afloat. The losses of the bank for this year alone, however, are still estimated to be around 1 billion Euro.
Not the end, perhaps not even the beginning of the end ?
That may well not be the end of it, because the Scandal-Bank (Scandalpe) can claim the ownership of multiple bad debts in its portfolio, totaling allegedly more than 7 billion Euro.

Two parliamentary commissions of inquiry were set up, one in Austria, the other one in Bavaria to find out, what went wrong and who is to blame.

So far it has transpired, that the Directors of the Bavarian LB,( the buyer) went into this costly excursion literally blindfolded at best, or, alternatively colluded with the Austrians at worst.
They disregarded the minimum of due diligence and thus ignoring the fact, that the bank was riddled with loans, that went already or are going to get sour, and that the bank was allegedly involved in all sorts of shady deals predominantly in Croatia including:

– Money laundering

– Arms financing

– Collusion with local politicians in Croatia to acquire pristine land and convert into residential land thus making seemingly good profits,

– Clients like the former Croatian Prime Minister Ivo Sanader and Ex President Tudjman´s advisers like Ivic Pasalic and Vladimir Zagoreg allegedly have been preferred clients of that bank, allegedly heavily involved in money laundering.

– Moreover allegedly a lot of loans were given for projects, that turned out to be mainly hot air.

No info, no questions
The supervisory board of the buyer, the BayernLB, that comprised mainly high ranking Bavarian politicians, were allegedly not properly informed, asked allegedly no serious questions and so the disaster took its course.

Meanwhile the former CEO Wolfgang Kulterer has been arrested on allegations of a variety of crimes including fraud. He had already been convicted in 2008 for falsifying the balance sheet of the Scandal-Bank in 2004, while he was still CEO of the Hypo-Alpe (Scandalpe).

Under investigations are also former Hypo-Alpe Director Guenter Striedinger and fromer CEO and Investor Tilo Berlin.

More than 50 complaints
More than 50 complaints have so far been lodged with the special prosecutor and his colleagues, mostly by the team now running the bank, apparently uncovering one sheet of dirty linen after the other.

The latest allegation is, however, the most serious one. It comes not from Austria, but from Serbia, where an international drugs dealer and Mafia-Boss by the name of Sreten Jocic alias Joca Amsterdam is standing trial for allegedly having ordered the murder of investigative Journalist Ivo Pukanic on 23rd October 2008 in return for 1,5 million Euro.

In the trial Jocic, about whom we will report in a separate article, mentioned, that the killing of Pukanic has something to do with the transactions of the Hypo Alpe Adria.

It would not come as a surprise, as Ivo Pukanic was targeting in his articles in the Croatian weekly journal Nacional only too often those figures, that we mentioned in connection with the alleged shady deals of the Scandal-Bank Hypo-Alpe-Adria.

linkHypo-Alpe-Adria – A Bank-Scandal in Austria?

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