Ex-HGAA boss freed from custody

Former Hypo Group Alpe Adria (HGAA) head Wolfgang Kulterer has been released from custody after three months.The banker, who is accused of being responsible for massive losses suffered by the bank in Croatia and other countries in southern Europe, left Klagenfurt prison yesterday (Thurs) after a bail of 500,000 Euros was transferred to juridical authorities.Kulterer’s lawyer Ferdinand Lanker stressed that his client did not come up with the sum himself – but remained tight-lipped over who coughed up half a billion Euros to free the businessman whose embezzlement charges trial is expected to get underway soon. If found guilty of having peculated more than 50,000 Kulterer and other defendants could be jailed for up to 10 years.Kulterer entered the Klagenfurt-based bank’s board of directors in 1992. He was forced to resign in 2006 after it emerged that the bank lost 328 million Euros in risky swap deals but failed to consider them in its annual business figures.HGAA was taken over by Germany’s BayernLB (Bayerische Landesbank) for 1.62 billion Euros in 2007. BayernLB lost an overall 3.7 billion Euros in the deal due to the dismal state of HGAA was following dramatic losses and its lax lending policy for real estate deals in Croatia and other countries it has been active in.The Austrian government of Social Democrats (SPÖ) and People’s Party (ÖVP) decided to nationalise the institute in December 2009. Most analysts regarded the decision as reasonable and necessary considering the negative effect a collapse of the bank could have had on the Austrian financial sector. ÖVP Finance Minister Josef Pröll promised he would make sure those found guilty will pay back every embezzled Eurocent.Kulterer was put in custody on 13 August of this year. Juridical authorities extended his custody several times, while Lanker branded the decision a “scandal”. The advocate said he lost his trust in justice and the control function of Austria’s juridical system due to how officials acted over Kulterer.A growing number of business magazines and newspapers, meanwhile, claim that the banker was nothing but a pawn in the game. They suggest it is impossible that one board member could be responsible for all malpractices carried out by decision-makers at the bank.Kulterer hit the headlines recently by asking for the right to hold press conferences while in custody. He cited fears his reputation would suffer further by “biased coverage” of the scandal around HGAA.Lanker stressed his client has always shown the will to cooperate with financial crime experts investigating procedures that went on at the bank during the past few years. Austrian police and prosecutors are currently investigating more than 50 suspects across Europe, while special parliamentary commissions in Klagenfurt and Munich, Bavaria, have questioned several politicians, former chiefs of HGAA and BayernLB.New HGAA chief Gottwald Kranebitter is currently trying to sell real estate and business participations owned by the bank in a bid to get it back on track. Kranebitter said his goal was to sell it with profit in 2012.The former Carinthian provincial bank suffered net losses of 449 million Euros in the first half of this year, and the European Commission (EC) called into question whether it would ever be profitable again considering its debts and credit responsibilities.Kranebitter controversially sent an “amnesty offer letter” to all employees of the bank recently in which he made clear the institute would not press charges against staff who reported themselves for any possible malpractices.The HGAA CEO informed employees in the letter that the bank would not lay off these employees. Kranebitter also explained HGAA will not demand financial compensation from those who come forward until 7 January 2011. The banker explained he took an example in the handling of German technology firm Siemens to clarify a slush money scandal.”We don’t ask staff to denounce each other, but expect those who broke the law to inform us about illicit operations they were involved in,” he said.