(Adds details of fines, background)
VIENNA Feb 27 Three former Telekom Austria
managers were sentenced to jail for share-price
manipulation in the latest sign of a crackdown down on
corruption in the Alpine republic.
The three were found guilty on Wednesday 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 9 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.
Over the two-week trial, the court had heard of cash
deliveries of hundreds of thousands of euros (dollars) in paper
bags, covert meetings in bars and contracts for market studies
that were never delivered.
Former Chief Financial Officer Stefano Colombo was sentenced
to three-and-a-half years in jail, former deputy Chief Executive
Rudolf Fischer to three years, and former wholesale manager
Josef Trimmmel to three years, of which two are conditional.
A fourth defendant, former chief executive Heinz Sundt, was
acquitted due to lack of sufficient evidence.
The three were impassive as the verdicts and an order to pay
a total of 10 million euros ($13 million) in damages to Telekom
Austria was read out. Their lawyers said they may appeal.
The convicted executives hired banker Johann Wanovitz of
Viennese investment firm Euro East to buy 1.2 million Telekom
Austria shares at the end of a key five days in February 2004
during which the closing share price had to average 11.73 euros.
After their bonuses were paid out - all but one of the 96
managers opted to take cash rather than shares - they paid him
about 1.5 million euros for his services out of company money,
some of it in cash.
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.
The case was the first to reach court from multiple
corruption investigations into the former state telecoms
monopoly that have damaged its reputation and may have cost it
tens of millions of euros.
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," he said.
A new generation of Austrian politicians and prosecutors has
begun to crack down on a cosy interplay of money and politics in
the affluent country.
Former interior minister and European parliamentarian Ernst
Strasser was sentenced to four years in jail for bribery last
month, and the Austrian parliament enacted a sweeping ethics
package last year, hoping to stem a series of scandals.
($1 = 0.7628 euros)
(Reporting by Georgina Prodhan; Editing by Elaine Hardcastle)