Small investors affected

Embezzlement trial: acquittal for Immoeast manager

"In case of doubt", a possible breach of trust by Petrikovics could not be established with the necessary certainty.

(Bild: Krone KREATIV/Apa/Roland Schlager Apa/Helmut Fohringer)

The trial against the former head of Constantia Privatbank, Karl Petrikovics, and Immoeast manager Christian Thornton for serious breach of trust ended on Friday with acquittals for both. According to the indictment, Immofinanz and Immoeast had granted loans worth millions to subsidiaries of Constantia Privatbank via detours in 2007, which were used to buy shares in the two companies. The verdict is not final.

The court of lay assessors came to the conclusion that the accusations of the prosecution could not be proven with the necessary certainty, as the presiding judge announced in the afternoon. In particular, no intent to cause harm could be proven. The public prosecutor initially made no comment, meaning that the verdict is not legally binding for the time being.

Facts of the case undisputed
According to the indictment, Immofinanz and Immoeast granted several million-euro loans to subsidiaries of Constantia Privatbank in 2007 via detours, which in turn were used to purchase Immofinanz and Immoeast shares. These facts were undisputed in the proceedings and were confirmed by Petrikovics from the outset. However, the prosecution assumed that the companies that received the loans had no significant assets. They were unsecured loans and neither the supervisory board nor the other board members had been informed, according to the accusation.

Petrikovics countered this by stating that the companies had assets and would still have been able to repay the loans even if the shares had fallen in value by 20 percent. Petrikovics also assumed that Constantia Privatbank was liable for its subsidiaries. The origins of the proceedings date back 17 years. Unsurprisingly, most of the witnesses in the proceedings could only remember vaguely. The judge also noted that this circumstance had complicated the proceedings. The main trial alone lasted almost a year with 20 trial days.

Petrovic's defense cannot be refuted 
The Senate has now come to the conclusion that it was "comprehensible" that Petrikovic's approach was that the cash advances including interest would be repaid. In the Senate's view, it could be assumed that Petrikovics had no doubt that the share price would rise and that he would make a profit. There was also sufficient liquidity at Immoeast and Immofinanz so that there were no signs of distress sales. "In case of doubt", a possible breach of trust by Petrikovics could not be established with the necessary certainty; Petrikovics' defense could not be refuted on most points.

In the case of Thornton, on the other hand, it had become clear that he had not been involved in strategic decisions and had assumed that Petrikovics' actions were lawful. Overall, it could not be proven that either of the two defendants seriously believed it was possible that the two real estate companies would suffer damage.

Thousands of small investors have been harmed by the Immofinanz scandal. However, this trial was not about the aggrieved shareholders, but about the damage that, according to the indictment, Immofinanz and Immoeast had suffered.