VIENNA Feb 27 Three former Telekom Austria
managers were given jail sentences of between three
and three-and-a-half years on Wednesday for manipulating the
share price to trigger bonuses for themselves and others.
The three were found guilty of breach of trust for arranging
the mass buying of shares in 2004 to push up the share price and
activate an incentive scheme that paid out a total of nine
million euros ($12 million) to 96 managers.
"They knew they were abusing their authority," Judge Michael
Tolstiuk told a Vienna court, putting the overall damage to the
company at around 10 million euros.
A fourth defendant, former chief executive Heinz Sundt, was
acquitted due to lack of sufficient evidence.
The case was the first to reach court from multiple
corruption investigations into the former state telecoms
The executives had engaged banker Johann Wanovitz of
Viennese investment firm Euro East to buy the 1.2 million
shares, later paying him about 1.5 million euros for his
services, some of it delivered in cash in a paper bag.
Lawyer Rudolf Mayer, defending ex-Chief Financial Officer
Stefano Colombo, had argued that the former executives were
victims of a changing culture in Austria, where business has
traditionally been done on the basis of friendships and favours.
"What in the past was considered business on the basis of
good relationships is corruption today," said Mayer, whose most
famous past client was Josef Fritzl, who locked up his daughter
in a cellar for 24 years and fathered seven children with her.
Colombo was given the longest sentence, of three-and-a-half
Rudolf Fischer, who ran Telekom Austria's fixed-line
business at the time and who had admitted approving a tranche of
500,000 euros for Wanowitz, was sentenced to three years.
Ex-wholesale manager Josef Trimmel, who introduced the
executives to Wanovitz and made many of the practical
arrangements, was sentenced to three years, two years of which
Colombo and Trimmel had denied wrongdoing.
Lawyers for all three said they would consider an appeal.
The verdict on Wanovitz will be delivered later after a
further witness who has been out of the country is available to
give evidence next month.
Most of the senior managers got payouts of around 200,000
euros, and all but one of the 96 opted to take their bonus in
cash rather than shares.
Telekom Austria is suing about 20 people to try to claim
back about 20 million euros it says it was tricked into paying
out for services that were not delivered.
Current Chief Executive Hannes Ametsreiter, who was a senior
marketing manager in 2004, is not accused of participating in
the share manipulation and has paid back his bonus.
($1 = 0.7567 euros)
(Reporting by Georgina Prodhan; Editing by Elaine Hardcastle)