Austria Appoints Auditor as Meinl Bank’s Fate Hangs in Balance
Embattled Austrian Bank Offered Clients 10% Cash as License Went
(Bloomberg) -- Anglo Austrian AAB Bank AG, better known under its old name Meinl Bank, was placed under government oversight on Friday with the appointment of a commissioner to protect creditors.
Austrian regulator FMA named auditor Friedrich Otto Hief to the post as it seeks to protect “the financial interests of the creditors as well as safeguarding the assets that have been entrusted to the supervised entity,” it said in a statement. The regulator can appoint a commissioner if it believes that a bank is on the brink of collapse to prevent management from taking decisions that can hurt creditors.
The move comes after a tumultuous week at the bank formerly named after the Meinl family, a coffee and retail dynasty in the Habsburg Empire and in post-World War I Austria that founded the bank in 1923 and still owns it. Anglo Austrian had begun to wind down its banking business after the European Central Bank withdrew its license last week. A European court suspended the ECB’s decision on Thursday.
In a sign of the strain on the bank, it had told clients with large deposits that they were at risk of losing their money, according to a letter seen by Bloomberg News. It offered to return 10% of their deposits with cash and 90% with loans secured by claims the bank has against others.
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Peter Weinzierl, a representative of the bank’s main shareholder, said in an interview on Thursday that Anglo Austrian is pursuing its own plan to wind down the banking business but wanted to do this in its own time.
FMA and regulators from other countries have accused Meinl Bank for years of neglecting its duties to prevent money laundering, charges detailed in the ECB’s 44-page order to revoke the license. It was also at the centre of a fight with retail investors that lost money with real estate group Meinl European Land.
The lender itself has claimed it’s the victim of a witch hunt and has done nothing wrong.
To contact the reporters on this story: Matthias Wabl in Vienna at mwabl@bloomberg.net;Boris Groendahl in Vienna at bgroendahl@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Luca Casiraghi, Jonathan Tirone
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