Austria Sued for $2.1 Billion Over Botched Apartment Sale From 2004
(Bloomberg) -- Austria’s 2004 sale of 62,000 government-owned apartments is still a big deal 16 years later -- for lawyers.
The alleged rigging of the auction by defendants including former Finance Minister Karl-Heinz Grasser has been at issue in one of Austria’s biggest corruption trials, which has been ongoing for the past two years. Now losing bidder CA Immobilien Anlagen AG is also suing the Austrian government for 1.9 billion euros ($2.1 billion) in damages.
The property company said in a statement that its lawsuit, filed Thursday evening, alleges it was “severely damaged by the unlawful influence on the bidder procedure.” The damages it claims equal the gains it would have made had it won the auction and held the residential units until now, the company said.
The Austrian government sold the apartments in 2004 to a group led by Immofinanz AG, another large landlord, which bid 961 million euros in the final round, narrowly edging out CA Immo’s 960 million-euro offer. That narrow win raised eyebrows immediately, but suspicions weren’t firmed up until years later, when prosecutors investigating Immofinanz in a different matter found payments they say were bribes.
According to the prosecutors in the criminal case, Grasser and others told Immofinanz how much CA Immo would be able to offer, receiving a kickback of 9.6 million euros. One defendant has confessed to the scheme, but Grasser and the others deny the charges.
A spokesman for Austria’s finance ministry declined to comment because the ministry hasn’t received the lawsuit yet.
The claims were brought against the federal government of Austria as well as against the province of Carinthia, whose late governor, the nationalist politician Joerg Haider, has emerged as one possible source of confidential information in the 2004 auction. Haider’s Freedom Party was the junior government partner of the conservative People’s Party at the time.
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