VIENNA (Reuters) - Austrian prosecutors have charged Julius Meinl V, chairman of Meinl Bank, with breach of trust as part of a multi-year investigation into dealings at the lender and a related firm, a spokeswoman for the Vienna criminal court said on Friday.
The charge touches on a potentially wrongly inflated dividend payment for the financial year 2008 which could have caused damage amounting to as much as 211 million euros ($254 million) to creditors of Meinl Bank, the spokeswoman said.
A Meinl Bank spokesman told Reuters on Friday the charges had no proper legal basis and called the accusations “absurd”.
Julius Meinl V, whose family founded one of Austria’s most recognized brands running food and coffee stores, was arrested in 2009 and later released on bail.
Four other Meinl Bank managers and board members were charged as part of the same investigation. Lawyers have two weeks to appeal against the decision, the spokeswoman said.
Since 2007, prosecutors and financial watchdog FMA have been investigating allegations that Meinl Bank and Julius Meinl were involved in unauthorized share buybacks at Meinl Land.
The investigations related to property firm Meinl European Land, which was launched, managed and advised by Meinl Bank and raised several billion euros from shareholders between 2002 and 2007 to acquire real estate in emerging Europe.
Meinl Land has since been taken over by Israeli investment firm Gazit Globe and was renamed Atrium European Real Estate.
On its website, Meinl Bank said of the case surrounding Meinl European Land it had “operated within the bounds of applicable law at all times”.
($1 = 0.8324 euros)
Reporting By Shadia Nasralla; Editing by Vincent Baby