Deal to settle lawsuits against BayernLB ex-managers

26th August 2014, Comments 0 comments

A German court said on Tuesday it has agreed to settle long-running lawsuits against four former directors of BayernLB over the regional bank's disastrous purchase of Austrian lender HGAA in 2007.

"On the basis of the evidence gathered so far, the charge of fraud in connection with the acquisition of the majority stake in HGAA cannot be proven with the requisite certainty," the higher regional court of Munich said in a statement.

Prosecutors and defendants had therefore agreed that the cases could be dropped after payments ranging from 5,000-20,000 euros ($6,600-$26,400).

Among the defendants are Michael Kemmer, former BayernLB chief and currently head of the BdB banking federation.

The four managers were accused of agreeing to too high a price for the acquisition in 2007 of Hypo Group Alpe Adria.

The real estate lender and Austria's sixth-largest bank came close to collapse during the global financial crisis and had to be nationalised in late 2009 in order to prevent a potentially disastrous domino effect in the region.

The episode cost BayernLB 3.7 billion euros and was a major contributor to the bank having to be bailed out itself with billions of euros in German taxpayers' money.

The court said there was also insufficient certainty of proving that the four ex-managers were involved with alleged bribery of the late Austrian far-right leader Joerg Haider, also in connection with the HGAA takeover.

At the same time, lawsuits against two other former BayernLB directors would not be dropped, the court said.

© 2014 AFP

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