Four former Kommunalkredit managers are accused of embezzlement and accounting fraud; the defendants pleaded "not guilty" at the start of the trial. With a "scapegoat" the prosecutor has compared the actions of the defendants.
The defendants are former board members Reinhard Platzer and Leopold Fischer as well as the former head of treasury and his deputy. You face up to ten years in prison, the presumption of innocence applies. For prosecutor Beatrix Winkler of the Economic and Corruption Prosecutor’s Office, all four defendants are guilty of the crime of breach of trust and the two former board members are also guilty of the crime of accounting fraud.
"The papers had to go off the balance sheet, like the scapegoat in the Bible who was driven out of town laden with sins," the prosecutor drew a biblical comparison. The Kommunalkredit bank is said to have been damaged in this way by six million euros, the attempted damage according to the indictment is 4.5 million euros.
Defendants face up to ten years in prison
Bank bailout costs two billion. Euro
Kommunalkredit was emergency nationalized in the fall of 2008, the Republic "bought" the institution for two euros from oVAG and Dexia Bank. Later it was split into "Kommunalkredit Austria" and the bad bank "KA Finanz. The bailout has so far cost the Republic two billion. Euro.
In the run-up to the emergency nationalization of Kommunalkredit in the fall of 2008, the special-purpose vehicle "Cora" was used to embellish the balance sheet, according to prosecutors. For these transactions, the defendants granted the – cooperating – other banks too favorable conditions for loans, according to the indictment. Furthermore, the former board members are said to have misrepresented the company’s figures to the supervisory board.
Kommunalkredit had sold the securities, which had fallen in value, to Cora, but Cora had no money, so investment banks were supposed to lend it. Cora then used this money to "buy" the securities from Kommunalkredit. For their part, the investment banks had received the money from Kommunalkredit – on favorable terms, according to the indictment.
Former Kommunalkredit board member Reinhard Platzer in the dock
"Only the good of the company in mind"
The defense attorney for the main defendant, ex-Kommunalkredit CEO Reinhard Platzer, argued that he had only had the "good of the company" in mind and had carried out the supervisory board’s mandate to reduce volatilities. "It was a matter of securing the rating and thus the bank’s ability to refinance," says lawyer Mario Schmieder. The then head of Kommunalkredit’s Board of Managing Directors had therefore acted on behalf of the Supervisory Board in order to preserve Kommunalkredit.
The court will still decide on the motion of all four defense lawyers to reject the court expert Gerhard Altenberger for the main hearing. The main hearing continues on Thursday in the Vienna Criminal Court. Platzer, the main defendant, is then questioned.
Transaction to Lehman after insolvency
The public prosecutor also charged the defendants with the Lehman transaction of 24 September 2007. September 2008 – shortly after the trial was held on 15 September 2008. September Lehman filed for insolvency. 8 million loan to Cora from Kommunalkredit. 5.57 million through HSBC. In reality, the 8 million euros in Lehman bonds could have been bought out of the "repack" but not reported in Kommunalkredit. This increased the risk in Cora from 125 to 132 million euros. Euro.
"It was clear from the beginning that not a single cent of it would be returned. In reality, the 8 million. must be valued at zero," said the public prosecutor. The two former Kommunalkredit board members Reinhard Platzer and Leopold Fischer as well as two former authorized signatories, namely the former treasury manager and his deputy, are in the dock. According to the prosecutor, the ex-managers tried to conceal the losses of Kommunalkredit, in the transactions carried out for this purpose, they would have damaged the bank.
In part, bad assets were repackaged so they could then be valued higher, but "rotten cookies continue to rot in the other drawer," the prosecutor said. The balance sheet embellishment had cost the bank money. In addition, the supervisory board had been misinformed. The investigations of the Economic and Corruption Prosecution Office (WKStA) took about five years until the indictment was completed. A total of 18 defendants were originally investigated.