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News from the Caribbean as of
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Austrian bank confirms 1 billion euro loss in Caribbean dealings
Monday, March 27, 2006
VIENNA, Austria (AFP): Austrian bank BAWAG Friday confirmed it suffered losses of about 1.0 billion euros (1.2 billion dollars) between 1995 and 2000 in high-risk financial dealings in the Caribbean.
Confirmation followed press revelations this week just months after Johann Zwettler, general director of BAWAG -- which is wholly owned by the Austrian Trade Unions Association OeGB -- resigned over a scandal involving a credit to the US commodities and futures broker Refco, accused of fraud.
BAWAG CEO Guenter Weninger is not expected to resign but he said Friday at a press conference in Vienna he would ask for his term not to be renewed when it runs out in April.
Since the terms of all board members expire on April 6, the board will simply be replaced and there will be no resignations, according to the daily newspaper Die Presse.
The national daily newspaper Der Standard reported Wednesday that BAWAG PSK (the Bank Corporation for Labour and Economy) lost about 13.6 billion Austrian schillings (1.0 billion euros) in five years after putting the money into high-risk businesses in the Caribbean island of Anguilla under former CEO Helmut Elsner.
Weninger said Friday he was only informed of the losses in late 2000 and chose not to make them public to avoid insolvency and losing clients, jobs and owner's assets.
The bank has absorbed the quasi-totality of the losses since then and any remaining sum is "very small and could not harm the bank," Der Standard quoted BAWAG as saying.
Die Presse cited the firm KPMG which did accounting work for BAWAG, as saying it had "overlooked nothing" and the bank's financial picture was correct.
But the general secretary of the ruling conservative OeVP party, Reinhold Lopatka, Friday criticised the trade unions, who are traditionally allied to the Socialist party (SPOe).
"This goes to show, when the SPOe or SPOe trade unionists play businessmen, things go wrong. In the economy, false concepts inevitably lead to crashes," he said.
General elections are due in Austria in autumn.
BAWAG faces possible legal action in the United States after it agreed to a 425-million-euro credit to US firm Refco and its chief executive Philip Bennett, later accused of fraud.
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