German prosecutors target former Hypo Real Estate directors

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The directors have been accused of providing insufficient information on the bank's situation before it required an emergency bailout in early October.

FRANKFURT -- Prosecutors in southern Munich said on Wednesday they had searched the apartments and offices of former directors of the troubled property lender Hypo Real Estate.

The directors have been accused of providing insufficient information on the bank's situation before it required an emergency bailout in early October.

The searches were made owing to "suspicion of inexact presentation, market manipulation and charges of fraud," according to the prosecutor's office.

They focused on the apartments and offices of the Hypo Real Estate's former board chairman Georg Funke and supervisory board president Klaus Viermetz, both of whom resigned in early October.

The private bank was strangled by a cash crisis in Sep. following huge losses suffered by its Irish unit Depfa.

In early October., the German government was forced to provide the bank with tens of billions of euros (dollars) in loan guarantees.

A few weeks later, a German association of small shareholders, DSW, filed a complaint against the bank, and an investigation was opened in early Nov.

AFP/Expatica

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