Meinl Bank: Buyback of MEL certificates in 2007 was consistent with Jersey law
Contrary opinion initiated by special interests of Elliott hedge fund
Vienna (OTS) – Meinl Bank announced a preliminary injunction against further payouts by Airports International (AI) and Power International (PI) in Jersey on Friday, 5 June. This measure was taken after the Board of Airports International and Power International, which was appointed by Elliott and other so-called rebels, unilaterally broke off talks, on Thursday 4 June, to the astonishment of those involved. The talks, which were being conducted in connection with the settlement of all outstanding reciprocal claims, had been constructive up until that point.
In this context there is also a press release by Atrium (dated Friday, 5 June) to be considered, stating that a group of bond holders – represented by Citicorp – are claiming a breach of Jersey law in connection with the buyback of MEL certificates in 2007. The Management of Atrium rejected the claim made immediately. An opinion by a British Queen’s Counsel dated 14 August 2007 also confirms that the buyback of the certificates took place in accordance with the law in Jersey.
As a trustee, Citicorp is merely a postal address for a bond of MEL/Atrium, and it is common knowledge in the market that a group led by the Elliott hedge fund is behind the allegations. Elliott bought up bonds at hefty discounts and now wants to achieve an early repayment at full nominal value. According to Peter Weinzierl, a Member of the Management Board of Meinl Bank, such an attempt to build up public pressure using specious legal arguments is consistent with the wider, general selfish strategy of Elliott, which has also been used at AI and PI in the past.
“It is certainly interesting that this action by Elliott relating to MEL/Atrium should come exactly one day after the breakdown of the talks with Meinl Bank regarding AI and PI. Yet again, this is entirely characteristic of the players involved here: The special interests of Elliott as mastermind along with their puppets on the Boards at AI and PI - this is the way the rebels reach their decisions. It is especially regrettable that the Elliott hedge fund has now chosen to implicate a previously entirely uninvolved company, namely MEL/Atrium, in its selfish actions as well.” notes Peter Weinzierl.OTS0083 2009-06-08/10:55
(Non official translation)
Decision to buy back certificates was taken by Steering Committee of MEL
Purchase of certificates by Meinl Bank took place on basis of individual purchase orders
Vienna (OTS) – Key sections of the claims and speculation relating to the buyback of Meinl European Land (MEL) certificates in 2007 expressed in today’s edition of the Oberösterreichische Nachrichten are false, and contradict information sent to the Oberösterreichische Nachrichten in advance by Meinl Bank at the newspaper’s request.- Although the statement made by Peter Weinzierl before the Independent Administrative Senate (UVS) is quoted correctly, the conclusion drawn from this, that “...the share buyback was a trick designed to preserve the legality to the outside world,” is false. In actual fact, the involvement of a so-called ‘Financial Assistant’ is usual, and was necessary because MEL wanted to stockpile its own papers for a strategic investor. This would not have been possible without the involvement of the firm Somal as Financial Assistant, as the buyback of certificates could have led to immediate collection and a capital reduction under the law in Jersey at the time. This would have defeated the object of accumulating the certificates.
- Furthermore, the statement of the MEL Directors does not contradict the information of Peter Weinzierl in any way. As already explained on several occasions, the Jersey Directors Peter Byrne and Michael Richardson were not members of the Steering Committee of MEL, which was responsible for decisions of this nature. The Jersey-based lawyers Michael Richardson and Peter Byrne were responsible for compliance with the legal regulations on Jersey. According to the information of Meinl Bank, the Steering Committee was properly constituted, and its members authorised the buyback of the certificates properly.
- Heinrich Schwägler confirmed in his statement that the decision relating to the buyback was taken by the MEL Steering Committee, and that he was involved in the decision as a member of this Committee. He also confirms that the accumulation of the certificates took place on the basis of individual purchase orders of MEL to Meinl Bank, and not within the bounds of market making. Meinl Bank had already pointed this out on several occasions. The statement of Heinrich Schwägler quoted by the Oberösterreichische Nachrichten, that no decision was taken authorising Meinl Bank to perform larger-scale buybacks in its function as market maker, has to be understood in this context and therefore the statement does not contradict other statements. Such a decision by the MEL Board was also not necessary because, Meinl Bank as investment bank, only performed the buybacks on explicit, precise orders of MEL, or Somal as the Financial Assistant of MEL.
Although this information was sent by Meinl Bank to the Oberösterreichische Nachrichten at the newspaper’s request, it implies in its article that the decision to carry out the buyback was taken by Meinl Bank, even though this contradicts the facts in its possession.
Meinl Bank strictly emphasises once again: the decision to buy back the certificates was taken by the Steering Committee of MEL. As an investment bank, Meinl Bank purchased the certificates on the basis of individual purchase orders of MEL or Somal.OTS0185 2009-05-20/12:50
(Non official translation)
Meinl Bank renews criticism of Corporate Governance Opinion
State Prosecutor’s Office confirms Corporate Governance not criminally relevant
Vienna (OTS) - The Corporate Governance Opinion commissioned by the State Prosecutor’s Office is investigating facts that are not criminally relevant, according to the most recent statement of that Office.
In September 2008, the State Prosecutor’s Office justified the appointment of the expert Thomas Havranek, who has no qualification as an expert in international banking, stock exchange and capital markets, on the grounds that he was the only expert in Corporate Governance. In the written “Expert Appointment”, Havranek is also explicitly commissioned to investigate the extent to which a Corporate Governance Code was applicable, and whether Corporate Governance guidelines were breached. The legal representatives of Julius Meinl and other defendants argued at the time that Corporate Governance was not a criminally relevant area.
Now, in response to an earlier newspaper commentary relating to the prejudice of Havranek, the spokesperson of the State Prosecutor’s Office, Gerhard Jarosch, has said to “Österreich”: “The subject of the text was Corporate Governance, which has nothing to do with the criminal aspects.”
“How is anyone supposed to understand this?” said an astonished Peter Weinzierl, a Member of the Management Board of Meinl Bank. “We have now seen an investigation continuing for nine months, at vast efforts and enormous cost to the taxpayer, which cannot produce any criminal allegations whatsoever. Massive intrusions into privacy, including house searches and arrests, have also been justified for these reasons.”
The contention that, in Thomas Havranek, the wrong expert has been appointed in the Meinl case, and that the State Prosecutor’s Office breached the principle of objectivity as standardised in §3 of the Code of Criminal Procedure, is the subject of applications by the defendants.OTS0258 2009-05-19/14:09
(Non official translation)
Meinl Bank: MEL buybacks were not authorised retrospectively – profil claims contradict facts in its possession
Vienna (OTS) – The claims and speculation about the buyback programme of Meinl European Land (MEL) in 2007 expressed in the latest issue of profil are totally unfounded, and contradict the information sent to profil in advance by Meinl Bank at the magazine’s request.
profil quotes from the minutes of an MEL Board Meeting held on 9 July 2007. Meinl Bank responded to profil on a request and the presentation of minutes the previous week as follows: “The presence of Mr. Visy at the Board Meeting is explained by the fact that, under the management agreement, the management company MERE was also regularly entrusted with the coordination of external services (in this case, primarily legal advice from Bedell und Freshfields). The MEL Board Meeting on 9 July 2007 had been called in preparation for the General Meeting on 23 August.”
profil withheld the crucial sections of this response from its readers: namely that, as a Board Member of the management company MERE, Stephan Visy was participating in the meeting to report precisely on the legal aspects of the buyback programme worked out by the offices of Bedell and Freshfields. The profil report also fails to mention that the meeting had been called in preparation for the General Meeting on 23 August.
Instead, profil puts forward the claim, despite having knowledge of the actual facts, that it can be concluded from Stephan Visy’s participation in the Board Meeting that the Members of the Management Board of MEL were “controlled” by Meinl Bank, and that the buyback of the MEL certificates was not authorised until later.
In response to this claim, Meinl Bank vigorously emphasises once again that the participation of the MERE Board Member Stephan Visy in the MEL Board Meeting took place in compliance with the contractual obligations of MERE towards MEL, which included amongst others the coordination of legal and business advice. It clearly cannot be deduced from this that Meinl Bank exercised any influence over the decisions of MEL. -According to the information of Meinl Bank, the buyback programme of MEL certificates was authorised in a proper and timely manner by the responsible representatives of MEL. The Board Meeting on 9 July 2007 was called in preparation for the MEL General Meeting on 23 August. This is also made apparent by the full version of the minutes of the meeting, which according to its own statement are also in profil’s possession.
The full version of the minutes, incidentally, which was also quoted by profil, was drawn up by the two Jersey-based Directors of MEL who profil claimed last week had not been informed about certificate buybacks in any way whatsoever. These minutes, therefore, clearly contradict the claims put forward by profil last week. OTS0011 2009-05-17/09:03
(Non official translation)
Meinl Opinion: “Schoolboy essay at taxpayer’s expense” – new application planned against expert
Vienna (OTS) – Meinl Bank intensifies its criticism of so-called the “preliminary opinion” of the expert Thomas Havranek, which was named as the essential basis for the arrest of Julius Meinl.
The preliminary opinion, which is just 25 pages in length but has taken six months to complete,
- contains over 80 demonstrable errors amongst the basic facts;
- is wholly inconclusive in itself;
- does not in any way address the extensive argumentation of Meinl Bank, which has been available for months and clearly refutes the respective allegations;
- repeats well-known allegations without providing any evidence to support these.
Peter Weinzierl, a Member of the Management Board of Meinl Bank, said: “The fact that this schoolboy essay is being passed off as a legal opinion at the expense of the taxpayer is inexplicable and actually a scandal.” He went on: “We shall certainly be looking into renewing our application to challenge the expert, as this opinion clearly proves his lack of qualification in the necessary subject areas.”
The following are summaries of some of the crucial errors contained in the individual allegations:
The opinion describes the management company, MERE, as a “100%-owned subsidiary of MEL (Meinl European Land)”. This is wrong. MERE is a subsidiary of Meinl Bank.
The opinion claims that Peter Weinzierl was a Member of the Management Board of MEL during the period under investigation. This is wrong. Peter Weinzierl resigned from the Management Board of MEL back in June 2005.
The opinion also claims that Meinl Bank’s right of consent relative to a call of the Partly Paid Shares (PPS) proves that the PPS were controlled by Meinl Bank. This, too, is wrong. The Board of MEL itself demonstrably retained control over the PPS at all times.
The expert also argues that, “The PPS ended up with Tshela, and therefore indirectly with Julius Meinl AG.” In fact, Tshela Nominees was not owned by Julius Meinl AG; instead, it was owned by a lawyer who was himself holding the PPS in trust for MEL. The discretionary power over the PPS was always with MEL. This was also consistent with the PPS being used as a precautionary measure against a hostile takeover. Meinl Bank has argued this, too, on a number of occasions in the past, and the appropriate documents have long been available to the expert.
The opinion also claims “…that the entire Meinl Bank Group, including MEL, was managed by Julius Meinl.” This is supposed to be proven above all by an e-mail in which Julius Meinl was asked to give his consent to a press release of MEL. This conclusion is also wrong. As the Chairman of the Management Board of Meinl Bank at the time, Julius Meinl was integrated into the flow of information. According to the market maker agreement, Meinl Bank was responsible for a part of the Investor Relations and Communications duties of MEL. This was because MEL did not have a branch in Austria, despite the fact that the majority of its capital markets communications took place here.
The opinion also claims that MEL bought back its own certificates at excessively high prices. This is wrong. The buybacks took place at the up-to-date stock exchange price of MEL at the time. The average price of the bought-back certificates was EUR 20.44. Analysts had forecast a 1-year price target of up to EUR 28 for MEL, significantly above the buyback price. The actual net asset value of MEL, including its projects, stood at EUR 21.21 at the time of the buybacks, again above the average buyback price. Consequently, an “overpayment” of EUR 399 million, as claimed by the expert, is not consistent with the facts.
The expert also completely disregards the fact that, during the relevant period in 2007, almost 11,000 buyback programmes were conducted, 95 per cent of which were above net asset value. The question of why the buyback programme of MEL should be illegal, therefore, is not specifically addressed.
On the question of excessive fees, too, the opinion randomly selects just nine property companies from a Morgan Stanley report and compares these on the basis of the relationship of their rental income to their fees. Such a comparison is not meaningful. A comparison of at least 30 companies which also draws on the relationship of their market capitalisation and net asset value to their fees would be meaningful.
Peter Weinzierl, a Member of the Management Board of Meinl Bank, said: “One could quote dozens of other examples of how this opinion simply ignores the facts, and compares apples with oranges. As is generally known, Mr. Havranek has no concession as an expert in auditing or banking, stock exchange and capital market law, and the result of his appointment can now be seen in this opinion. This is not just a waste of taxpayers’ money, however; to arrest a person and subject him to monstrously large bail of 100 million euros, a sum never imposed anywhere in the world before now, on the basis of an unqualified document such as this, is highly questionable constitutionally.” OTS0295 2009-05-13/14:25
(Non official translation)
Österreich – the Havranek Opinion
The Strange Paper of the Meinl Expert
The preliminary opinion of the expert Thomas Havranek regarding the Julius Meinl case is causing amazement with legal experts. Many sections are unintelligible.
Vienna. The preliminary opinion is barely 25 pages long. For the State Prosecutor’s Office, however, it provided sufficient grounds to arrest Julius Meinl V and subsequently impose record bail of 100 million euros.
The preliminary opinion on Criminal Case 608 ST 1/08w Julius Meinl was leaked to ÖSTERREICH from legal circles. Many of the allegations are superficial in the extreme, unsustainable, or even wrong. The legal experts involved are simply astounded at the quality of the opinion, which could eventually cost hundreds of thousands of euros.
Meinl Bank had even submitted an application to challenge Havranek in advance – on the basis of lack of qualification, amongst other things. As a court expert, Havranek is not in fact authorised to deal with questions involving capital market law.
Wrong subsidiary. In an effort to demonstrate the interconnection between Meinl Bank and MEL – always strenuously denied by Meinl – the opinion says the following, for instance: “As mentioned, MERE is a 100%-owned subsidiary of MEL.” In truth, however, MERE (the management company of MEL) was a subsidiary of Meinl Bank.
Meinl faces allegations concerning three key points, all of which he denies. He is alleged to have secretly manipulated the activities of Meinl European Land (MEL). He is also accused of massively defrauding his investors; in concrete terms, it is alleged that MEL certificates were bought back at an inflated price, with damage of some 1.8 billion euros (suspicion of embezzlement).
The promotion of MEL papers is said to have been misleading, and the management fees charged excessively high (suspicion of excessive charging of commissions).
This is said to prove “that the entire Meinl Group, including MEL, was being managed and governed by one person: Julius Meinl V.” For the State Prosecutor, this sentence provided sufficient grounds to incarcerate Meinl.
Havranek, however, did not provide evidence to support this claim.
Amusement. The allegation of “suspicion of excessive charging of commissions” is also based on the preliminary opinion. Havranek refers to a report by the investment bank Morgan Stanley. In this document, according to the opinion, 27 property companies were analysed. To prove the allegation of excessive charging of commissions, Havranek “randomly selected nine companies (including MEL) for comparative purposes”.
Just the fact that “randomly” is still mentioned explicitly is causing amusement amongst legal experts involved.
Meinl Bank itself points out that the fee structure was transparent and fully in accordance with international standards.Source: “Österreich, 05/10/2009”
(Non official translation)
Meinl Bank: profil report confirms legality of certificate buybacks
Vienna (OTS) - The letter from the two former directors of Meinl European Land (MEL), Michael Richardson and Peter Byrne, to the Jersey authorities, the JFSC which is quoted in the current issue of profil clearly proves that the buybacks of MEL certificates in the spring of 2007 were ordered by the Board of MEL. Contrary to what was stated by profil, the Steering Committee of the MEL Board bore exclusive responsibility for decisions of this nature, in accordance with the published articles of association approved by the Jersey authorities. The Steering Committee consisted of Georg Kucian, Heinrich Schwägler and Karel Römer. The Jersey-based lawyers Richardson and Byrne were responsible in particular for ensuring that legal regulations in Jersey were observed. “The purchase of certificates ... took place without our involvement as directors (note: Richardson and Byrne), although the other directors were involved and knew the extent of the certificate purchases,” profil quotes from the letter from the Jersey directors.
“This once again confirms that the decision to conduct the buyback was entirely lawful made by the responsible directors, and not, as spuriously claimed in the allegations, due to the influence of Meinl Bank or its representatives,” said Peter Weinzierl, a Member of the Management Board of Meinl Bank.
Weinzierl described the intention of the expert Thomas Havranek to also incorporate all exculpatory facts into his opinion, as reported in profil, as an “interesting, but barely credible declaration of intent.” The so-called preliminary opinion of Havrane, which was been presented so far contains nothing but unsubstantiated claims and close to one hundred factual errors, said Weinzierl. None of the arguments submitted by Meinl Bank have been anyhow considered by Havranek.OTS0022 2009-05-10/11:07
(Non official translation)
Meinl Bank: New private opinion “More like a PR gag than a legal assessment”
Vienna (OTS) - Meinl Bank strictly rejects the claims made by the tax advisor Manfred Biegler in an opinion compiled on Meinl European Land and reported by Wirtschaftsblatt. In the opinion, Biegler repeats allegations and insinuations that have long been in the public domain and that have already been refuted by Meinl Bank. “Many of the points made in the submissions of Mr. Biegler resemble the Havranek preliminary opinion, which is acknowledged to contain 72 errors over its 25 pages,” said Peter Weinzierl, a Member of the Management Board of Meinl Bank. “The so-called opinion of Mr. Biegler is three times as long, and consequently may be expected to contain three times as many errors.” None of the allegations made by Biegler can be sustained. It is also revealing that the document was sent to a newspaper first of all. “This looks more like a PR gag than a serious legal assessment,” said Mr. Weinzierl.
Examining the claims individually:
- Commercial papers: it was legally established in a High Court judgment almost a year ago that the commercial papers were issued for tax reasons, and that Meinl European Land paid no net interest from this.
- Trust loans: after Meinl Bank granted trust loans on behalf of MEL to subsidiaries of MEL, interest payments were made by MEL’s subsidiaries to MEL, and not to Meinl Bank. These trust loans were absolutely necessary from a taxation viewpoint, which is also why the effective tax burden at the MEL Group was only between 2 and 4 per cent. This effective tax configuration directly benefited MEL, and therefore the investors. Due to the nature of such trust loans, the trust loans were eliminated in the course of the consolidation. Consequently, this could not have led to a balance sheet extension or an increase in fees. Statements to the contrary by Mr. Biegler can only be due to a lack of expertise on his part.
- Fees: the opinion of Mr. Biegler does not mention any new fees. Instead, fees regularly presented correctly in the prospectuses are repeatedly listed under different names in a misleading manner. All the fees paid to Meinl Bank were charged at standard market rates, and the services were properly rendered.
Peter Weinzierl, a Member of the Management Board of Meinl Bank, said the following: “It is incredible that investors who have lost money due to the international financial crisis are now having more of their money taken from them by self-appointed experts for work of very little substance.”OTS0126 2009-05-08/11:12
(Non official translation)
Meinl Lawyers: Harsh Criticism of “Preliminary opinion”
At least 72 demonstrably false facts and claims
Vienna (OTS) – More than a month after his arrest, Julius Meinl has now received a copy of the 25-page document, described as a preliminary opinion, containing the principal reasons why he was arrested and placed on remand.
On first inspection, the preliminary report, written by Thomas Havranek over a six-month period, appears to contain no fewer than 72 demonstrably false facts and claims. In addition to this, while the preliminary opinion contains numerous legal and other assessments, it offers no evidence whatsoever to support these. Instead, it relies quite generally on inspected documents, and fails to respond in any way to the arguments or evidence submitted by the defendants.
Almost one month ago, Julius Meinl and the other defendants filed an application challenging the expert Thomas Havranek for prejudice and lack of qualification. Thomas Havranek is qualified for the subject area of Office Systems, limited to Security Management, Compliance and Corporate Governance, and Taxation. The challenge was dismissed by the State Prosecutor’s Office, without reasons being provided for the decision.
The lawyers of Julius Meinl are currently compiling a correction which, in contrast to the preliminary opinion, will also have indisputable evidence attached to it.OTS0340 2009-05-06/19:08
(Non official translation)
Double victory for Julius Meinl =
Vienna (OTS) -
- Two requests for injunctions by plaintiffs refused
- Third consecutive court ruling in favour of Meinl and Meinl Bank
The request to grant an injunction to ban Julius Meinl from mortgaging or selling his property in Styria has been rejected by the civil court of Graz. The plaintiff, represented by the lawyer Mag Ulrich Salburg, had maintained he had a just case, yet according to the ruling, no evidence was provided to back up the claims. Lawyer Salburg lodged the claims against Julius Meinl and trumpeted them in the media just a few weeks ago. Meinl’s lawyer, Georg Schima said: “The fact that the court rejected the claim solely on the basis of the plaintiff’s claims and without hearing from Mr Meinl clearly shows just how irrelevent the public prejudgement was for the plaintiff’s assertion. It is all the more pleasing to see that the civil courts did not allow themselves to be influenced by all this media coverage, and made the correct legal de-cision.”
The Vienna Inner City District Court also rejected the application to grant an injunction to ban the Austrian Republic from making payments to Julius Meinl from the EUR 100 million deposited bail in the amount of 100,000 or using this in any other way, because the plaintiff was said to be entitled for a compensation to this amount. Again the court justified its decision against a total of 3162 plaintiffs, all represented by the lawyer Mag. Ulrich Salburg, based on the fact that the plaintiffs had not attested that Julius Meinl was entitled to the bail. In fact, Julius Meinl could prove that the bail was not paid by him. Therefore the claim had to be re-jected.
Last week, a claim that had been made against Meinl Bank by the Upper Austrian Po-duschka Anwaltsgesellschaft mbH for alleged mis-leading of an investor with the purchase of MEL certificates,was rejected by the Vienna District Court for Commercial Matters. OTS0054 2009-05-01/12:27
(Non official translation)
Julius Meinl’s business trip approved by judge and public prosecutor
Utl.: No intention to pull out of the proceedings =
Vienna (OTS) – An article in “Heute” regarding a trip abroad undertaken by Julius Meinl contains several false allegations and it should be noted that the trip abroad in question,made by Mr Meinl for business reasons, had been approved in advance by the responsible judge, and was therefore under-taken with the knowledge of and in agreement with the judiciary.
The allegations in “Heute” that Julius Meinl “may return to his homeland” is a tendential allegation that is not formed on any particular basis. As with anyone else, the presumption of innocence also applies for Julius Meinl. He is committed to clearing his name through legal proceedings. At no point did Mr Meinl intend to withdraw from the proceedings.
The court had granted his release subject to certain conditions. Until now, Mr Meinl has strictly observed these obligations and will also continue to observe them. Mr Meinl is expressly permitted to travel abroad to carry out his professional duties. The judge had correctly approved his most recent trip abroad in accordance with the corresponding court order. The fact that “Heute” sees this as a “bold judicial action”, is an incomprehensible prejudgment.
The fact that the spokesperson for the public prosecutor, Gerhard Jarosch, was, according to “Heute”, “surprised by the news”, is also hard to believe since the trip abroad was also expressly approved by the responsible public prosecutor.
Furthermore, several times in recent days “Heute” has continued to make the repeatedly refuted claim that Mr Meinl was accused of damages of EUR 6.4 billion. Julius Meinl’s lawyers explained on Monday of this week that this amount is based on incorrect double calculations and furthermore that no damage has been caused by Julius Meinl.
The caption "Im Nobelauto verlässt er das Ge-fängnis" (He leaves prison in a luxury car) which appeared in “Heute” was also incorrect: the image shows Mr Meinl in a Viennese taxi. OTS0190 2009-04-30/11:56
(Non official translation)
Meinl wins test case: First investors’ claim dismissed.
Vienna (OTS) – The allegation made against Meinl Bank for a client of the Upper Austrian law firm Poduschka was rejected by the Vienna District Court Chamber for Commercial Matters.
The plaintiff commissioned the bank to purchase MEL certificates in 2005, this purchase request is now being contested due to an asserted error. The District Court Chamber for Commercial Matters rejected the plaintiff’s claim due to a lack of active claim legitimation.
This was the first in a number of what are essentially identical claims against Meinl Bank to be rejected.OTS0127 2009-04-28/10:54
(non official translation)
Meinl case - Lawyers see "medial prejudgement"
Utl.: MEL Advertisement entitled "gilt-edged" defended
Vienna (APA) - The lawyers of banker Julius Meinl V, Herbert Eichenseder and Christian Hausmaninger rejected all allegations against their client in front of journalists once again on Monday. There is clearly a "medial prejudgement" with reference to court documents, said Eichenseder, and added that the suspicion surrounding Meinl however had not intensified. The lawyer was quoting from a witness statement from ex-MEL spokesperson Francis Lustig, which said that Julius Meinl always kept his roles strictly separate from the companies MERE (MEL Management Company) and MEL (Meinl European Land).
Eichenseder reported that the lawyers had not yet received the expert’s preliminary report for the Meinl case. The objection request against the expert was rejected by the court. The next court date for Julius Meinl will be the next reporting date in May. The banker was released on parole, and must regularly report to the court.
Meinl’s second lawyer, Hausmaninger, once again resolutely rejected the alleged damage sum reported in the media of more than EUR 6 billion that Julius Meinl is reportedly being charged. This figure apparently has emerged through double counting and unfounded allegations. Furthermore, the lawyer stressed that the banker Meinl had not made the decisions at MEL. " MEL was a separate enterprise", said Hausmaninger, of approx. 50 MEL board meetings, Julius Meinl apparently only attended one in person. The responsible MEL bodies made the decisions, said the lawyer, and he gave various names including Heinrich Schwägler and Karel Römer.
Hausmaninger also defended the disputed MEL advertisement entitled "gilt-edged": That sort of advertisement was typical of the industry at that time, almost all Austrian property companies advertised in this way, including Immofinanz and Bank Austria Realinvest, said Hausmaninger.
Julius Meinl is being investigated by the public prosecution office on suspicion of serious commercial fraud among other things, the presumption of innocence applies.APA0513 2009-04-27/15:28
(non official translation)
Meinl Bank: 60 interested parties for AI/PI portfolio
Utl.: -Weinzierl: "Proof of the good work carried out by former management"
Vienna (OTS) – A report in Wirtschaftsblatt, which states, according to AI/PI Chairman Wolfgang Vilsmeier, that there are already 30 interested parties for the invest-ments of Airports International and Power International, is "a clear sign that the portfolios of both companies are good and valuable", says Peter Weinzierl, member of the Managing Board of Meinl Bank. All investments were acquired by the former board and under the management of Meinl Airports Manager.
"Until now, the rebel board has made unfounded allegations and presented absurd figures to give the impression that poor services were provided in the past", explains Weinzierl, "the fact that, according to the information from Mr Vilsmeier, even large corporations such as E.on and RWE are interested in the projects proves the opposite, namely that the work carried out was good."OTS0043 2009-04-26/12:59
(Non official translation)
Meinl: Simple calculation proves allegations are false
Vienna (OTS) – For the alleged damages of EUR 6.4 bil-lion for Meinl European Land, Meinl Bank refers to a simple calcula-tion that clearly demonstrates the absurdity of the allegations made against Julius Meinl: If the alleged damage of EUR 6.4 billion is di-vided by the number of certificates of MEL (now known as Atrium), i.e. 212 million, there would be a damage of EUR 30 for each certifi-cate. In fact, MEL’s highest rate was EUR 21.40. This alone quite clearly demonstrates that the allegations are false. And it does not even take into account the fact that every certificate holder from Atrium has still an interest in a healthy company with EUR 1.25 billion in cash assets and EUR 2.5 billion in properties. Peter Weinzierl, member of the Managing Boarf of Meinl Bank, comments: "It is incredible that allegations that are so obviously false were made public without anyone questioning them. This shows the effect that the prejudgement has already had in this case."OTS0041 2009-04-26/12:53
(Non official translation)
Meinl lawyers: Public statements of public prose-cutor’s office questionable from constitutional point of view
Vienna (OTS) -
- Statements not documented
- Prejudgement instead of presumption of innocence
The continuous public allegations by the public prosecutor’s spokesman Gerhard Jarosch, as recently published in the current issue of “Profil”, are inexplicable. The defendant has to date not been presented with a single document or a single testimony that would support the claims made by Jarosch. As already stated in a press release yesterday, exactly the oppo-site can be read in the frequently cited interrogation protocol from ex-MEL spokesperson Francis Lustig. According to this, Julius Meinl kept his functions “strictly separated” from MERE and MEL .
The public prosecutor’s approach of continually making claims public without providing any proof for them raises constitutional questions. Ac-cording to the principles of constitutional law, the public prosecution office must prove a defendant committed an offence beyond all reasonable doubt. However, in these proceedings the continuous distribution of unproven information is instead creating public prejudgment for an offence that was not committed.
In addition the attempt to construe the direct influence of Julius Meinl on Meinl European Land, is no reason for a seizure and a huge bail. The claimed EUR 6.4 billion in damages for Meinl European Land or for Meinl European Land investors is understood to be absurd and also not in-curred or caused by the conduct forming the subject of the accusation issued by the public prosecutor. Julius Meinl never exercised determining influence over MEL and in the absence of a proven offence at MEL this issue would in any case be irrelevant.
With a public prejudgement like the one that currently exists, the presumption of innocence loses its full significance.OTS0034 2009-04-25/11:45
(Non official translation)
Meinl’s solicitors: Alleged amount of loss ‘ridiculous and not understandable’
Subtitle: Double counting of alleged amounts of loss / justification for danger of flight false
Vienna (OTS) - Despite repeated requests it was not possible so far to obtain the ‘preliminary opinion’ of the expert which was a significant basis for the unjustified imprisonment, Julius Meinl’s solicitors said today in a statement.
But even without insight into the ‘preliminary opinion’ the calculation of the amount of loss alleged in the current ‘Format’ is mathematically wrong considering the presumptions contrary to facts and in content it is far-fetched in any case. The amount of 6.4 billion Euro exceeds the capital collectively raised from investors by more than 50 percent and is ridiculous at first glance based on this reason alone. It is not explainable why actions are taken with such vehemence against a fund structure which is international common and completely legitimate according to commercial and capital market law and that has been subject of detailed examinations by Austrian and international law firms regularly.
If the theories of the court order were correct the Austrian capital market would have to close down.
On the alleged loss calculation in particular:
- There is no obligation for a company’s management board, even more so in case of sufficient liquidity (MEL had free assets of 1.8 million Euro even after completing the buy-backs of certificates), to issue authorized capital at any time.
Using the same logic, the Erste Bank for example would have had to utilize the authorized capital at its current all-time high. By not issuing this authorized capital the Erste Bank therefore would have suffered a loss as well which now has to be offset by the Austrian Republic within the bank aid package. Accordingly the alleged damage of 3 billion Euro from the partly paid shares of MEL not being retrieved is false and relates to monies that never existed.
- The buy-back of MEL certificates was not made above the intrinsic value; this stood at over 21 Euro, the buy-backs were made for 20.78 Euro on average. There is no prohibition to buy back securities above company value, neither in Jersey nor in Austria. Otherwise a majority of management boards in stock exchange listed companies in Austria would require examination as well.
- The partial loss of 1.8 billion Euro suggests that something completely without value was bought for this amount. In fact valuable certificates of MEL were bought for this amount which have this intrinsic value at least. The money flowed back to the certificate holders.
- Further alleged amounts of loss of 400 million Euro and 1.2 million Euro have already been included in the aforementioned 1.8 billion Euro. Here we have a very straightforward double counting resulting from another but similarly wrong type of loss calculation.
- In the end it is completely false to make a damage calculation for the cut-off date of 20 March 2009 since the incident allegedly causal for the damage already was published in August 2007.
Furthermore reasons for the decision are incomprehensible in many cases.
In his alleged incriminating witness statement Francis Lustig for example testified exactly the opposite of which is claimed now in public. It expressly says in his records of interrogation: “Mr. Julius Meinl always kept his functions very clearly separated from the mentioned companies MERE and MEL …”
The justification for the danger of absconding is false as well since it is inadmissible to classify a person as in danger of absconding due to their different EU citizenship. Furthermore it has been proven that the plane was not waiting at the airport Vienna with a full tank but was abroad for maintenance. The property in Uruguay is incorrect as well as the one in England.
“It is astonishing that they are not ashamed to take the public for such fools,” Meinl’s solicitors say. “Everything is mixed up in the Format article.” Julius Meinl has nothing to hide and nothing to fear from the imminent publication of the documents protected by official secrecy. “However, it has to be investigated how documents from court records can leak out to the public,” the solicitors said. OTS0257 2009-04-24/01:40pm
(Non official translation)
Meinl’s solicitors: Alleged amount of loss ‘ridiculous and not understandable’
Subtitle: Suspicion can be refuted by indisputable evidence in further proceedings
Vienna (OTS) - The solicitors of Julius Meinl, Dr. Herbert Eichenseder and Dr. Ernst Schillhammer, firmly refute the accusations against their client pub-lished in ‘Format’. The alleged amount of loss of 6.4 billion Euro was ‘completely ridiculous and not understandable in any way,’ the solicitors say. The remand warrant only reflects the presumption of suspicion which can be refuted by indisputable evidence in further proceedings.OTS0360 2009-04-23/06:58pm
(Non official translation)
Meinl Bank: Mismanagement of rebels responsible for MAI value loss
Sub-title: The new board is responsible for two thirds of the loss in value of MAI’s TAV shareholding
Vienna (OTS) - The net loss of 174.5m Euros for the 2008 fiscal year published today by Meinl Airports International (MAI) is the result of months of inactivity and the new board’s mismanagement under Wolfgang Vilsmeier, according to Meinl Bank.
The board has been in office now for nine months. Since then not one single project has been acquired or further developed. The airports in Poland and Parma as well as Ulan Ude airport in Russia have dramatically decreased in value as a result of management inactivity. Member of the Meinl Bank Management Board Peter Weinzierl: “Airports are complex projects on which one has to work intensively and continuously. If you neglect projects for nine months, of course dramatic value loss is unavoidable.”
The largest charge in the present - unaudited - MAI financial statements is in relation to the shareholding in the stock exchange listed Turkish airport operator TAV. Here the board failed to offload MAI’s shareholding in light of the international crisis and the liquidation of MAI that was already intended in September 2008. The rebels were thus responsible for two thirds of the loss in value of TAV, said Weinzierl.
Meinl Bank further criticises MAI’s audited 2007 financial statement that was amended “freehand” by the new board and without auditing. According to Weinzierl, this is not legally or economically comprehensible and grossly misleading investors.
No breach of contract by Meinl Bank subsidiary MAM
Meinl Airports Manager (MAM), a one hundred percent subsidiary of Meinl Bank last week responded to a claim for damages by MAI of over 210 million Euros with an 86 page written pleading. The written pleading was submitted to the Royal Court of the Island of Jersey.
MAM pleads in it that- the investments proposed by MAM and carried out by the former MAI board were consistent with the company’s business plan and were properly transacted
- on MAM’s part there were no breaches of contract and MAM worked fastidiously as a management company
- At the time of investment (2nd half of 2007 and 1st half of 2008) the projects were after due evaluation considered reasonable and appropriate profits could be expected
- all investment decisions by the former board were made on the basis of all available documentation
- the former board had an internationally renowned airport expert at their disposal, Lou Turpen, the former CEO of San Francisco and Toronto airports, who carefully checked the investments based on his many years of experience
MAM filed a lawsuit against MAI, in which they are demanding compensation for damages suffered due to the one-sided cancellation of the management contract on the part of MAI. These damages amount to about 75 million Euros according to MAM. Meinl Bank has also brought an action against MAI for the illegal cancellation of the licence agreement amounting 15 million Euros.
At the MAI annual general meeting today Meinl Bank did not categorically reject the suggested repayment of share capital to MAI certificate holders, but did warn MAI against a hasty sale of assets under the current, extremely negative market conditions.
In addition Meinl Bank points out again that before the repayment of capital in form of a special dividend or a capital reduction all open third party claims must be considered. Such claims do not only exist on the part of Meinl Bank but also for example in conjunction with projects. Member of the Meinl Bank Management Board Peter Weinzierl: “Before a repayment of capital is possible the MAI directors must confirm that no third party claims against the company are impaired by such a transaction. Every board member is personally liable for the correctness of this statement.”
As with PI, Elliott Associates hedge fund is MAI’s most influential shareholder and benefits the most from the planned liquidation of the company. Meinl Bank therefore reemphasises that the planned liquidation is not in the interest of small investors.
As with PI, Meinl Bank also criticises that the MAI board still has not presented a specific plan to process the liquidation and for distribution to certificate holders.
OTS0196 2009-04-22/12:43
(Non official translation)
Meinl Bank: services for MIP performed in their entirety =
Vienna (OTS) -- Management fee for 2009 1st quarter was also paid by the new board on the due date.
- Vilsmeier confirms MPM management company’s reliable work.
- Board refuses information about personal fees
With regards to the decisions made today by the general meeting of Power International (formerly MIP) Meinl Bank points out again that a liquidation of MIP mainly benefits the most influential group of shareholders under the leadership of Elliott Associates, one of the globally most aggressive hedge funds. Consequently, since the last general meeting in November 2008 Elliott has increased its share to 6.2 million certificates and now holds almost eleven percent of the company.
The board under the leadership of Chairman Wolfgang Vilsmeier left important questions open in today’s general meeting. In particular the question of how much the current board members are personally paid by the company remained unanswered. This is not a signal for transparency announced by the “rebels”.
A specific plan to process the liquidation and distribute the proceeds to certificate holders is still not in place.
The planned sale of company assets in the current challenged market situation does not make economic sense in Meinl Bank’s opinion. The targeted company liquidation is therefore not in the interests of retail investors who have joined at a much higher market price than the Elliott group.
However, Meinl Bank is prepared to assist in finding a pragmatic solution which is acceptable for all involved parties.
Meinl Bank comments on the 2008 PI company results published today as follows:
the published figures are provisional data and according to the board have not yet been confirmed by the auditor. With the exception of a project in Hungary other existing projects have not experienced any depreciation. This shows that the portfolio acquired under MPM management is of value and is also generating profit in the crisis.
Meinl Bank performed the contractually agreed services properly and in return received the contractually agreed fees in their entirety and on the due date from the company. The management fees for the last quarter of 2008 and the first quarter of 2009 were also paid in their entirety by the new board. Meinl Bank considers this to be confirmation that the fees are in no way excessive and that the new board does not see any reason to find fault with Meinl Bank and/or Meinl Power Management (MPM) services. PI Chairman Wolfgang Vilsmeier also attested in today’s general meeting that the management company had worked well.
Meinl Bank once again rejects the allegation of excessive fees. The agreed fees are within the standard market range. The statement by Chairman Vilsmeier that the MPM management company calculates its fees on the basis of gross asset value (company assets including external financing) is incorrect. In fact MPM only charges its fees on the basis of net asset value (assets without external financing).
OTS0296 2009-04-21/15:18
(Non official translation)
Meinl Bank: no breaches of contract by Meinl Bank subsidiary MAM =
Vienna (OTS) -- 86 pages of written pleading were submitted by MAM against Airports International
- no claims have been made against Meinl Bank
- all MAI investments were approved at the time by international airport experts
Meinl Airports Manager (MAM), a one hundred percent subsidiary of Meinl Bank submitted an extensive written pleading in the process against Airports International (AI, formerly known as MAI) to the Royal Court of the Island of Jersey on 16th April 2009. MAM is demanding compensation for damages incurred as a result of the one-sided breach of the management contract by AI in this process. These damages amount to about 75 million Euros on the part of MAM and to about 15 million incurred as a result of the one-sided breach of the licence contract. AI filed a claim for damages against MAM and Meinl Bank in January 2009due to alleged breaches of contract. The damages alleged by MAI amount to 210 million Euros.
In the submitted 86 pages of written pleading MAM pleads that- the investments proposed by MAM and invested in by the former MAI board were consistent with the company’s business plan and were properly transacted
- on MAM’s part there were no breaches of contract and MAM worked fastidiously as a management company
- the investments from the 2nd half of 2007 and the 1st half of 2008 were after closer inspection at the time reasonable and appropriate profits could be expected
- all investment decisions by the MAI board were made on the basis of all available documentation
- the board had an internationally renowned airport expert at their disposal, Lou Turpen, the former CEO of San Francisco and Toronto airports, who carefully checked the investments based on his many years of experience
Meinl Bank does not categorically reject the repayment of share capital to MAI certificate holders. It warns though against a hasty sale of assets under the current extremely negative market conditions.
In addition Meinl Bank points out that before the repayment of capital in the form of a special dividend or a capital reduction all open third party claims must be considered. Such claims do not only exist on the part of Meinl Bank but also for example in conjunction with projects. Meinl-Bank executive Peter Weinzierl: “Before a repayment of capital the MAI directors must confirm that with such a transaction no third party claims against the company are impaired. Every board member is personally liable for the correctness of this statement.”
OTS0142 2009-04-20/12:12
(non official translation)
Meinl lawyer: charge on Lehenshofen estate is purely a matter of process
Sub-heading: AdvoFin petition legally weak
Vienna (OTS) - The media excitement about the addition of a charge s in the land register of the Lehenshofen estate is incomprehensible for Julius Meinl and his lawyers. “This is purely a matter of process which the court must make as a compulsory step if a petition is submitted referring to the land register”, says Georg Schima from the Kunz Schima Wallentin chambers in Vienna. “A certain shortcoming of the applicable law is that in the process it is possible to annoy or damage a property owner by malicious and weak petitions and this can be counteracted if necessary with a claim for damages due to the malicious conduct of a case,” says Schima.
The petition for a charge ban is legally weak in the opinion of Julius Meinl and his lawyers and therefore should be rejected. There are no investor claims against Julius Meinl at all and are not remotely recognised - as the other AdvoFin petition regarding the deposit also shows.
If investors are entitled to claims for damages, then in individual cases if they may not have been adequately advised by their consultants - who are mostly from external investment companies - about the risks of an investment in MEL securities. Such claims - each individual claim must be checked - should be made against the consultants, not at Meinl Bank and definitely not at Julius Meinl.
The fact that AdvoFin would rather have the dispute in the spotlight of the media than in court is typical and does not really speak for the quality of the arguments. Furthermore the second petition has already been brought before the wrong court.
OTS0068 2009-04-20/10:28
(non official translation)
Meinl Success: number of customers stable
Sub-heading.: Results already consolidated in Meinl Bank annual accounts
Vienna (OTS) - The financial statements of Meinl Success Finanz AG for 2008 published today are already included in the Meinl Bank consolidated annual accounts announced at the start of the year. Despite a significant decrease in turnover affecting the whole sector including retail sales of major banks last year, Meinl Success’ number of customers remains largely stable. The decline of roughly 14 percent was already announced in the bank's annual accounts.
Contrary to the reports by profil, AWD was not a sales partner of Meinl Success.
Meinl Success will respond to the challenging conditions within the financial markets with an extended range of products and is confident that together with its sales partners it can generate further growth in the coming year.
OTS0018 2009-04-19/10:55
(non official translation)
Meinl Bank: no transactions with the Prinzhorn foundation
Sub-heading: profil speculation is fictional
Vienna (OTS) - Neither Meinl Bank nor any associated company nor any related party have accepted Atrium certificates (formerly Meinl European Land.) from the Prinzhorn private foundation. A report in profil which raised the suspicion that Meinl Bank had bought Prinzhorn private foundation MEL certificates at “fantastic terms”, is completely fictional. Meinl Bank emphasises such a transaction has not taken place.
profil’s account that Meinl Bank has refused to make any comment to profil on the events is also unfounded. In fact contrary to journalistic due diligence rules profil has not requested a statement from Meinl Bank on the expressed speculation.
OTS0014 2009-04-19/10:19
(non official translation)
FMA (Financial Market Authority) confirms:
No evidence of cash drains from Meinl Bank (excerpt from APA press release based on a press conference held by the FMA-executive Board K. Pribil and H.Ettl)
“Meinl Bank” is under “regular observation” by the authority in respect of potencial cash drains”, explained Pribil. “We don’t have “evidence of any large withdrawals of money” and Meinl Bank has adequate capitalisation” said Ettl.
2009-04-16/15:14
(non official translation)
Meinl Bank: Allegations in the Format magazine were repeatedly proved to be wrong.
Vienna (OTS) -
- alleged conspiratorial meetings concerning buy-backs have not taken place
- MEL has not bought a single certificate from Somal
- MEL decisions were exclusively taken by the MEL Board.
The statements in the current edition of the Format magazine suggesting that conspiratorial meetings had taken place at Meinl Bank prior to an ad hoc announcement on buy-backs dated 29th August are false. As is commonly known, the buy-back programme of MEL had been fully completed by 30th July 2007. The buy-backs had been communicated in the general assembly on 23rd August. In the ad hoc announcement from 29th August, MEL merely stated their position with respect to the buy backs and explained their further procedures. An alleged conspiratorial coordination of the buy-backs therefore was not possible at this time.
Meinl Bank again points out that all and any decisions concerning capital measures for MEL are taken by the Board of MEL.
Somal construction correct and according to international custom
Meinl Bank also rejects the accusations that have repeatedly been published by Format concerning unjustified payments Meinl Bank allegedly received by Meinl European Land in connection with capital increases, and concerning speculative transactions Meinl Bank has allegedly carried out with investors’ money. On the contrary, any payments made to Meinl Bank were executed according to contract and in accordance with the conditions published and approved in the capital market prospectus.
In connection with the MEL capital increase of 2007 Meinl Bank had taken over the responsibility to place all certificates issued or to take them over on their own risk. Meinl Bank complied with these responsibilities. Infringement of the limits for large exposures according to the BWG (Austrian Banking Act) did not prevail.
The placement of a part of the certificates with Somal, an independent third party with no connections to Meinl Bank is a common procedure, particularly for large-scale capital increases. The purpose of such a measure is to enable a continuous placement of certificates, particularly to private investors or for savings plans during a period after the subscription period.
The risk for rate fluctuations for the certificates taken over by Somal was exclusively with Somal.
Meinl Bank states explicitly that no single certificate taken over by Somal has been bought back by MEL, neither directly, nor indirectly. In Spring 2007, Somal was able to place all the certificates they held on the market, while placement was carried out exclusively “over the counter” (OTC) to banks, distribution organisations and financial servicing companies. The buy back programme by MEL, on the other hand, was exclusively carried out through the stock exchange.
By the time when MEL started to buy back their own certificates in a large extent, the certificates that Somal had held initially had long been placed to the largest extent. The allegation published in Format, stating that Somal being influenced by the Meinl Group had benefited from the buy-back programme of MEL to the disadvantage of the investors therefore is proved to be unfounded and simply wrong.
MEL portfolio correctly described in the advertisement brochure
With respect to the planned charge against Julius Meinl brought to court by the lawyer of an investor for allegedly incorrect statements in an advertisement brochure, Meinl Bank replies that the facts and numbers were cited correctly in the respective brochure. The real estate assets of 4.5 billion EURO stated in this brochure also included development projects that had been contractually determined by that time. This method of calculation is also used for determination of the so-named NAV2 (Net Asset Value) according to international custom. The value of the real estates is determined on the basis of independent and tested assessment reports by internationally renowned real estate experts (Cushman).
Moreover, the MEL press release, dated 22nd January 2007, presented in detail the distribution of the real estate assets of MEL to finished objects and contractually fixed development projects to the public.OTS0100 2009-04-10/13:35
(non-official translation)
Meinl Case - Meinl Bank – All allegations rebuffed
Subtitle: Stock exchange prospectus accepted by FMA -– PPS as take-over defence – no excessive commissions
Vienna/APA
Member of the Meinl Bank Management Board, Peter Weinzierl has once again rebutted all allegations which have been made against the bank and the Meinl companies European Land, Power and Airports. He does not understand the charges. He says the companies have always acted legally. He stated that he found it “difficult to identify the specific losses for the investors,” said Weinzierl today to journalists. In comparison with other real estate companies, for example in the case of Immofinanz, which is listed on Vienna’s stock exchange, MEL/Atrium is considerably better placed today.
The stock exchange prospectus of Meinl European Land (now Atrium European Real Estate), which is domiciled in Jersey, was accepted by the Austrian Financial Market Authority (FMA). In the prospectus, fundamental points are mentioned, of which MEL is today accused. The allegation of excessive commission to Meinl Bank, which as market maker of the three companies earned money from the issue of securities, has no standing, said Weinzierl. The costs for the public offering of MEL is “within the normal limits” for Meinl Bank with 6 percent fees. The management fee, licence fees and marketing fees were not excessive either, he stated. In fact, Meinl Bank did not even levy a performance fee.
In the MEL stock exchange prospectus, which was approved by the FMA, it is regu-lated that the Austrian Take Over Regulation did not apply for the company which is domiciled in Jersey. Furthermore, it is stipulated here that the company is not limited in the buyback of its own shares. In conjunction with the disputed certificate buyback of MEL up until the summer of 2007, Weinzierl also rebuffs all allegations: the allegation that the MEL stock exchange price was kept up is not true, he stated. The average price target for the certificates, determined at that time by analysts, was above the value at which the MEL certificates were then bought. The MEL price slump could also have been triggered by the staggered knock-outs of “turbo certificates”, said Weinzierl today. There are presumptions of certain procedures on the market. Naturally, all involved are presumed innocent of all charges until proven guilty.
The member of the bank’s Management Board once again defended the disputed partly paid shares of MEL (PPS). They were set up to fend off a take-over. In addition to the 300 million securities listed on the Vienna stock exchange, MEL had another 150 million shares which were not listed on the stock exchange. For the PPS, just one Cent per share was paid. They were held by Tshela Nominees, which is domiciled on the Caribbean island of Aruba. The real holders of the PPS were not made known by MEL for a long time. The then MEL-spokesperson said, in August 2007, that major European investors, who had no connection with Meinl Bank, owned these shares. "At the end of the day, the MEL board was authorised to have them at their disposal,” said Weinzierl today. These securities would have been transferred to a “white knight” in the case of a hostile take-over bid. A voice of the PPS could also be in the interests of the shareholders.
Weinzierl also defended the Somal structure: during the buyback of the papers, this Caribbean company accumulated the certificates “for MEL’s account”. As there was a “legal unclarity” as to whether these would not have to be retracted in accordance with Jersey law, a third party – Somal – was needed to park the certificates. Ultimately, Somal belongs to Julius Meinl AG but the orders for the transaction came from MEL.
Investors now want to take hold of the 100 million Euro bail, which banker Julius Meinl V. provided last week as the bail for his release from detention. The process financier of MEL investors, Advofin, has applied for a provisional injunction to secure the money for any possible claims by investors. If the plaintiff proves his claims, furnishes prima facie evidence of his claims together with the fact that the deposited bail belongs to the respondent’s assets, a preliminary injunction could be successful, according to the spokeswoman of the Ministry of Justice this Tuesday on the Ö1-Mittagsjournal programme ion ORF Radio.
In parts, this is treading virgin legal territory. The report states that possibly urgency should only be applied in order to achieve an out-of-court settlement with investors.APA0525 2009-04-07/16:51
(non official translation)
Meinl Case - Meinl Bank acknowledges outflow of funds, bank stable
Subtitle: Julius Meinl V. continues as chairman of the Supervisory Board – Participation in Power and Airport management companies depreciated to zero in 2008, Grasser function had “expiry date”
Vienna (APA) – As a result of the latest turbulence surrounding the arrest of Julius Meinl V., Meinl bank has indeed suffered marginal outflows of money by some unsettled customers. However, the financial institute’s situation is stable, emphasises member of the Meinl Bank Management Board Peter Weinzierl. “There have been withdrawals but not to any significant degree,” said Weinzierl this Tuesday to journalists in Vienna. The Bank has a strong substance and a high equity ratio of over 42 percent (as of end 2008). Therefore, its existence is in no way at risk, guaranteed the manager. The bank manages assets of around 2.5 billion Euro.
Once again, the member of the bank’s Management Board defended all the dealings in conjunction with the three controversial investment companies, Meinl European Land (MEL, now Atrium European Real Estate), Meinl Airports International (MAI) and Meinl International Power (MIP). He declared that there was a “clearly structured corporate group”. He does not understand the reproaches of a particular lack of transparency and excessive charges for the Meinl Bank. Only “communication” could have been improved, “I still see no errors in the structure”.
Weinzierl himself is among those incriminated by the justice system. He is accused of severe professional fraud and breach of trust. Weinzierl said he himself had been questioned by the public prosecution service. Today he spoke, accompanied by one of the Meinl Bank’s lawyers, Manfred Ketzer, to the journalists. He did not want to provide any details on the criminal investigations. Weinzierl and the other accused are presumed innocent until proven guilty.
The president of the Supervisory Board, Julius Meinl V., who was temporarily detained last week, will continue in his function, “even if he is now perhaps a touch less active,” says the member of the bank’s Management Board. Julius Meinl is a “sparring partner” for the Management Board, “he always has good ideas”. The 100 million Euro for the bail, which Julius Meinl had to put up for his freedom, does not come from Meinl Bank. According to the Austrian Banking Act, this is absolutely impossible, assured Weinzierl.
Meinl Bank has already written off the shares in the management companies of the former Meinl Power and Airport companies in the 2008 financial statement. Weinzierl was today reluctant to comment on the fact that ex-Finance Minister Karl-Heinz Grasser announced that he would step down from the Power company after the temporary arrest of Julius Meinl V. He stated that Grasser’s role in the Power company had an “expiry date” in any case as it will be agreed at an upcoming general assembly of the Power company to liquidate the company, presumably under the new management. He did not know any further details.
Meinl Bank owns two thirds of Meinl Power Management Ltd. (MPM); Grasser holds one third. Last year, Grasser and Meinl Bank offered their shares in the management company for a total of 32 million Euro to MIP; this option was limited until the end of July 2008. At that time, according to the option, Grasser’s share would have been worth about 10 million Euro. The value of Grasser‘s one third of MPM has apparently declined sharply in light of the crisis and turbulence surrounding the Meinl business affairs: At any rate, Meinl Bank has already written off its two-third participation in MPM in its 2008 financial statement, Weinzierl said today.APA0418 2009-04-07/14:51
(non official translation)
Meinl Case - Meinl Bank: Jet was being repaired, no getaway planned
Subtitle: Julius Meinl always appeared at all authority appointments – MEL buyback justi-fied by prior economic issues
Vienna (APA) – Meinl Bank has rejected a report by the Swiss "SonntagsZeitung" news-paper which stated that a private jet was standing by in Vienna for banker Julius Meinl last Wednesday, the day of his arrest. The report lacked any foundation, said a statement by Meinl Bank on Sunday afternoon. "The mentioned private jet was not in Vienna last week. It was being repaired. Neither was it ready to go.” Julius Meinl had "at no time planned to flee from the investigation."
Furthermore, Meinl had always declared his willingness to appear at official appointments. For example, on 16th March, he had obeyed a subpoena to testify before Vienna’s commercial court. He had also appeared for interrogation by Vienna’s public prosecution department “willingly and with the intention of using his testimony to clarify the accusations”. After the interrogation, Julius Meinl was detained on Wednesday night due to a flight risk. On a record bail of 100 million Euros, he was released on Friday morning on certain conditions. Investigations against Meinl are being carried out on suspicion of severe professional fraud and breach of trust. He is presumed innocent until proven guilty.
According to a Meinl Bank statement, contrary to the report by the "SonntagsZeitung", Julius Meinl has no assets in Switzerland. Citation S.A., which is mentioned in the report, is a subsidiary of Meinl Bank, which has been active in Zurich as an investment manage-ment agency for 25 years. The bail, set at 100 million Euros, was transferred from a Liechtenstein bank to Vienna. Julius Meinl’s lawyers did not want to comment on the ori-gin of the money on Friday.
A statement by former Meinl European Land (MEL) spokesperson Francis Lustig was also disputed by Meinl Bank. The buyback of MEL certificates by the company made completely no sense economically, Lustig said in the "Standard" newspaper (weekend edition). Contrarily, Meinl Bank makes reference to the fact that the majority of analysts in spring and early summer of 2007 assumed that there would be continuing increases in real estate prices in Eastern Europe and also that there would be an increasing stock exchange value for MEL. In the analyses, there was talk of a stock exchange price target of up to 28 Euros. The intrinsic value of the company, which was based on expert ap-praisals at that time, was clearly above the average buyback price of about 20 Euros. "In this respect, the buyback made complete economical sense from MEL’s point of view at that time."
Member of the Meinl Bank Management Board Peter Weinzierl said, "If the markets had recovered, as was forecast by most, including the then US Finance Minister Henry Paulsen, in August 2007, MEL investors would have come out of the buyback with a high profit. Mr. Lustig apparently evaluated the development of the markets better even than the US Finance Minister and the international analysts. However, hindsight is easier than foresight.” In answer to the statement by ex-MEL spokesperson Lustig that he warned Julius Meinl at the time, Meinl Bank comments that the decision to buyback was ultimately made by the MEL board. Meinl Bank carried out the buyback on behalf of MEL.APA0232 2009-04-05/15:29
(non official translation)
Meinl Bank: Parting from Grasser amicable and planned
Subtitle: "End of management contract with MIP foreseeable after general meet-ing”
Vienna (OTS) – With regards to the announcement by Karl-Heinz Grasser to sell his shares in Meinl Power Management Ltd. (MPM), Meinl Bank confirms that this is a planned and amicable measure. Currently, Meinl Bank holds 66.7 percent of the shares in the company; Karl-Heinz Grasser holds 33.3 percent.
"Due to the changed situation at MIP, for which MPM currently acts as management company, an end to the contractual relationship, and with it the tasks of MPM, is foreseeable after the imminent general meeting. Therefore, the step put into place is in the interests of both Mag. Grasser and Meinl Bank," explains member of the Meinl Bank Management Board Peter Weinzierl.OTS0057 2009-04-04/22:14
(non official translation)
Julius Meinl V. Case - Meinl Bank: No cash outflows
Subtitle: Bank is able to "continue to operate quite normally", situation "not pleasant" - "WirtschaftsBlatt": bank says PPS flotation to protect against MEL take-over
Vienna (APA) – To date, the arrest of Julius Meinl V. has not caused any cash outflows, said the bank today with regards the APA inquiry. The bank is able to “continue to operate quite normally” without the chairman of the Supervisory Board. Meinl V. will return from jail today. The bank managers are at work “normally”. No members of the Management Board have been questioned by the authorities today or yesterday. It is presumed that some of the management interrogations took place before the Meinl arrest.
Bank owner Julius Meinl V. had already retired from the Management Board of the bank at the end of 2007. Since then, he has acted as the chairman of the Supervisory Board.
The bank’s statement admitted that some bank customers had already made inquiries about the case. But there had been “no runs” on the bank yesterday or today. Long-term customers “know the bank well and trust it.” Ultimately, the financial institute is well situ-ated. The employees know that, even if the situation for the bank is “not pleas-ant”.
Meanwhile, the affair surrounding the former Meinl European Land (MEL, now Atrium Real Estate) is bearing strange fruits on the civil law front, as the "WirtschaftsBlatt" (Friday edition) reported. In response to an Advofin legal action, Meinl Bank argues that the issue of the disputed partly paid shares (PPS) by MEL was to protect against a hostile takeover by Immofinanz. The process financier Advofin had filed a lawsuit against Meinl Bank and Oesterreichische Kontrollbank (OeKB) claiming the invalidity of the MEL share-holders meeting resolutions.
The PPS "served as a so-called 'takeover defence', because at this point, MEL was con-fronted with the blatant attention of Immofinanz AG," wrote the bank to Vienna’s commer-cial court, according to the newspaper. "In addition, the PPS were not traded on the stock exchange which is why they were irrelevant for the free float calculation." They had no effect on the free float and, as a shield against takeover, they were even in the interests of the complaining investor. In addition, the bank claimed that the decline of the MEL stock exchange price in the summer of 2007 could not be attributed to the buyback of the certificates. Instead, it was due to “the adverse speculation of other market partici-pants in the way of short sellings.” This claim was refuted by the Financial Market Authority (FMA) in February 2008.
For Advofin boss Franz Kallinger, the answer of the bank made it “clear where the PPS should be attributed”, as he said today when asked by APA. The interest of Immofinanz has had no disadvantage for investors. Rather, it could even have led to a price boast. "The issue here is not the protection of the certificate holders but the protection of Meinl," says Kallinger. Only 1 Cent per unit was paid for the 150 million PPS, as was reported. However, they had a total value of 2.3 billion Euros according to the "WirtschaftsBlatt". One million Euros is said to have been paid to the Caribbean letterbox company Tshela as commission.APA0342 2009-04-03/13:04
(non official translation)