UniCredit's Bank Austria to pay EUR240m to German government.
Global Banking News - 30 March 2010(c)2005 - Electronic News Publishing - http://www.enpublishing.co.uk
Bank Austria, a unit of UniCredit SpA (UCG.MI) (OTCBB: UNCFF) (CRDI.MI) (CRDI.F) (CRDI.WA) (LSE: UNC), may have to pay Germany up to EUR240m in a court case involving the embezzlement of funds from companies in the former German Democratic Republic, or GDR, Bank Austria said.Last week, a Swiss appeals court has ruled in favour of the German government, which accused a former subsidiary of Bank Austria, now called AKB Privatbank Zurich, of having participated in the embezzlement of funds from companies in the GDR. Bank Austria said that it will appeal against the court ruling.
Bank Austria, which has since sold the unit, is acting as the leading intervening party in the lawsuit. Germany is represented by BvS, the legal successor of Deutsche Treuhandanstalt, the German public body, which was in charge of managing GDR assets.
On June 25, 2008 the Zurich District Court had rejected the request of BvS, but on March 25, 2010 the Zurich District Court of Appeal gave an unexpected judgement in favour of the plaintiff. If the final decision will also be in favour of BvS, the potential risk may amount to EUR128m, or EUR240m including interest, Bank Austria said.
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