The 400 million euro case

“Nobody needs to feel safe, no perpetrator will get away with it.” If someone like Wolfgang Hofer that says, the situation is quite critical. The board of directors of the B&C Foundation, chairman of the supervisory board of the industrial holding of the same name and one of the best-known and most experienced commercial lawyers in the country, feels betrayed and betrayed. He sees “a huge fraud and accounting fraud scandal. But no Wirecard in Austrian, because Schur’s business is real.”

It is about the takeover of the Lower Austrian packaging manufacturer Schur Flexibles last year and the recent exit from the company with 2,200 employees. All in all, the adventure cost B&C a loss of almost 400 million euros, according to Hofer.

The WKStA is investigating five suspects – the former CEO of Schur, the head of finance, a manager and two employees (names known to the editors). Because of the suspicion of embezzlement, money laundering, accounting fraud and corruption. Eleven house searches, confirmed WKStA spokeswoman Elisabeth Däubl. According to Däubl, it is suspected that transfers from the company account to the CEO’s private accounts “without objective justification”, the company taking over costs for private expenses, partly bogus invoices and the payment of “unreasonably high salaries or bonuses to corporate bodies”. The amount of damage is still being determined, currently a double-digit million amount is assumed.

Strong tobacco. Did a well-established team of three managers actually plunder a company and live in the lap of luxury at the company’s expense? It is the presumption of innocence.

Luke Kollman, the former CEO’s lawyer, strictly rejects the allegations. It should be distracted from the “given aggressive business policy and own decisions, with which one was no longer satisfied after the takeover, should be passed on to the former management or former bodies”. In the course of the takeover, Schur Flexibles was examined for months by around 140 experts and the management was relieved on an ongoing basis, most recently on September 30, 2021.

Did B&C buy in a hurry and therefore too expensive? There is also – again – the question of the auditor who certified the balance sheet, in this case PwC.

“Not visible”

“We used the best due diligence people we could get, but there was no evidence of the criminal work,” says Hofer. However, the seller, the US fund Lindsay Goldberg (LG), had built up time pressure. Exclusive negotiations were held with B&C for this.

In the first quarter, alarm bells rang at B&C when it realized that actual Ebitda (earnings before interest, taxes, depreciation and amortization) was less than 40 million instead of the reported 80 million.

It all started so beautifully. B&C was looking for another investment. The former board member and ex-boss of Palfinger, Herbert OrtnerSchur landed through personal contacts.

Everything looked like a good deal. Specialized in the food, pharmaceutical and cosmetics industry, well-known major customers, a sure-fire success. 22 plants in half of Europe, 540 million sales. However, according to the ex-management, the company, which was indebted to 680 million, made annual losses of between 10 and 20 million and was on the verge of over-indebtedness.

The former CEO, himself with a 1.6 percent stake, earned a lot, including high bonuses and special payments, more than many ATX board members. 2.5 million in 2019, almost three million in 2020 and finally 12 million in 2021, including five million sales proceeds for his share.

In November 2021 he received a new five-year contract from B&C. “But not in these dimensions,” Hofer fumes. “The excessive additional benefits and bonuses were not disclosed in the due diligence, so we were not aware of them”. A contract with market-compliant remuneration was disclosed, B&C assumes that the bonuses are largely unauthorized payments, i.e. withdrawals, by the ex-CEO and his accomplices.

Two top-quality rental apartments in London, including staff, for EUR 250,000 a month are said to have been intended for the planned IPO and approved by B&C. “Absurd, do you seriously think it’s part of B&C’s habit to squander money like that?” Hofer thunders.

Schur is now owned by the creditor banks and the US fund Apollo. B&C tries to recover at least part of the damage through two guarantee insurance policies. Hofer: “We are fighting resolutely for redress. Our knowledge makes us confident.”

By Editor

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