Banker Julius Meinl arrested over alleged fraud
Banker Julius Meinl V, chairman of Austria's closely held Meinl Bank, was arrested late on Wednesday on suspicion of defrauding investors in secretive share buybacks in 2007, Vienna prosecutors said on Thursday.
The arrest follows investigations by prosecutors and financial watchdog FMA after an anonymous complaint in September 2007 relating to Meinl European Land, a listed real estate firm started and managed by Meinl Bank.
The most serious (charge) is defrauding investors by buying back shares to prop up the share price, said Michaela Schnell, spokeswoman for Vienna state prosecutors. He was arrested because there is risk of escape.
Meinl Bank confirmed the arrest of Meinl, who chairs its supervisory board and is a member of the Meinl family that owns the bank. The bank said the arrest came after he was questioned by prosecutors on Wednesday night.
Shares in Meinl Land lost two thirds of their value in 2007 after the group revealed share buybacks not authorized by its shareholders which had supported the share price for months at a time when Meinl Bank was selling Meinl Land stock.
Shareholders allege that Meinl Land, Meinl Bank and the bank's fund manager, Meinl Success, misled and misinformed shareholders in the process. Meinl Bank has denied the allegations and says it has not violated any applicable rules.
Meinl Land was launched, managed and advised by Meinl Bank and raised several billion euros from mostly retail shareholders between 2002 and 2007 to acquire real estate in emerging Europe.
Meinl Land was taken over by Israeli real estate investment firm Gazit Globe last year and renamed Atrium European Real Estate
Gazit Globe is not connected in any way to Julius Meinl or his bank, a Gazit spokeswoman said.
(Additional reporting by Sylvia Westall in Vienna and Tova Cohen in Tel Aviv; editing by Simon Jessop)
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