VIENNA Feb 11 A former Telekom Austria
boss on trial for his part in a market manipulation
scandal apologized for approving a payment to a banker who
bought shares in the company, triggering bonuses for dozens of
In the first court case resulting from multiple corruption
probes into the company, Rudolf Fischer said he had okayed the
500,000 euro ($669,000) payment but had not known it would be
delivered in cash in a plastic bag at a popular Vienna market.
"I know it was a mistake. I'm sorry," said Fischer, pleading
partial guilt to a charge of corruption.
Fischer said the banker had bought the shares at his own
risk, not as the result of any formal contract made with Telekom
Austria managers, and the intention had been to pass some
future, legitimate business his way as a sign of gratitude.
Fischer, who then ran Telekom Austria's fixed-net segment
and later became deputy chief executive, has since paid the
money back to the company.
Fischer and four others are accused of arranging the mass
buying of Telekom Austria shares in 2004, causing a price rise
that triggered a payout of about 9 million euros for 100
managers at the company.
He and the four others - three former top Telekom Austria
managers and the banker who bought the shares - face up to 10
years in jail if found guilty. The other defendants pled not
guilty of corruption on Monday.
The probes into alleged slush funds, political payoffs and
market manipulation have damaged the image of former monopoly
Telekom Austria, which is still partially state-owned and now
also part-owned by Mexican telecoms tycoon Carlos Slim.
They are among a plethora of corruption and bribery cases
making their way through the legal system in Austria, where
prosecutors are trying to root out a tradition of doing business
and politics through personal connections and favours.
Prosecutor Hannes Wandl said Fischer - together with ex-CEO
Heinz Sundt, ex-CFO Stefano Colombo and ex-wholesale manager
Josef Trimmel - conspired to pay banker Johann Wanovitz a total
of 1.5 million euros to push the share price up to the target.
"Was it in the interests of the shareholders that the top
managers decided themselves whether they deserved the bonus? The
answer is a very clear 'No'," Wandl told the court.
Fischer said Wanovitz had agreed to buy the 1.2 million
shares at his own risk, and that Telekom Austria had informally
agreed to give him business in the future if the scheme worked.
He said he had then forgotten all about the promise until
several months later when Trimmel, who knew Wanovitz personally,
reminded him that the banker was still waiting for his side of
the bargain to be fulfilled.
By then, Telekom Austria was under investigation by the FMA
financial regulator over the share price movement and could not
enter into a direct contract with Wanovitz but concealed the
payment in a contract with a third party, Fischer said.
The FMA's investigation found no wrong-doing.
Fischer said the payment of the bonuses had been essential
to keep up the motivation of employees, who had missed out in
2002 and 2003 after the share price plunged when the company
issued a profit warning within months of its market debut.
Telekom Austria's current Chief Executive Hannes
Ametsreiter, who in 2004 headed the company's mobile marketing
operations in Austria, last year paid back the bonus he received
as a result of the price rise and has denied wrongdoing.
He is now trying to claw back 20 million euros from 20
people suspected of defrauding the company by claiming payments
for services they did not provide.