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VIENNA: An Austrian court convicted on Friday the former chief executive of BAWAG bank and eight others of gambling away 1.72 billion euros (2.7 billion US dollars) in speculative investments in the country's biggest-ever fraud scandal.
After a year-long trial, during which 104 witnesses were heard in a total 116 court sessions, Judge Claudia Bandion-Ortner found former chief executive Helmut Elsner, 73, guilty of fraud, breach of trust and falsification of accounts.
He was sentenced to nine-and-a-half years in prison.
The court also found Elsner's successor, Johann Zwettler, 66, guilty of breach of trust and sentenced him to five years.
BAWAG's former secretary general, Peter Nakowitz, 45, received a four-year jail sentence.
Former board members Hubert Kreuch, 64, and Josef Schwarzecker, 55, were each sentenced to three and a half years.
Auditor Robert Reiter, 59, was given a three-year sentence, with two years suspended.
Former supervisory board chief Guenter Weninger, 67, received two and a half years, of which two years were suspended.
Hedge fund manager Wolfgang Floettl, 52, was sentenced to two and a half years in jail, with a 20-month suspension.
Only ex-board member Christian Buettner, 51, will not have to go to jail: he received an 18-month suspended sentence and a fine of 36,000 euros.
The 1.72 billion euros in losses -- incurred in a series of risky derivative trades since the late 1990s -- were uncovered in October 2006, pushing BAWAG to the brink of bankruptcy and forcing its owners and founders, the Austrian OeGB trade union, to sell it to a US investor, Cerberus, in December of that year.
It was Floettl, a US-based investment banker, who made the investments. He claimed that BAWAG managers had given him a free hand to invest the money in whatever he wanted and was even told to go ahead when he warned Elsner about the risks.
For their part, the bankers claimed Floettl ignored investment rules and proceeded with riskier investments than he was authorised to do.
- AFP/jk
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