Thursday, June 04, 2009
Equivocal Headline of the Day: Why the Austrian economy failed
£90m bail for Briton blamed for collapse of Austrian economy
I tried to warn them they were setting his bail too high. But would they listen? No!
The size of the bail was in fact a "first"—
After several generations of rubbing shoulders with the Hapsburgs, Julius Meinl V, a British passport-holder and the grandson of the architect of his family's post-war success, found himself as an unexpected guest of Vienna's 170-year-old Josefstadt Prison for two days after he was arrested on suspicion of causing a €3bn fraud.
The 49-year-old millionaire, who was born in London, owns a black Bentley and uses his family's 800-acre estate in Wiltshire, secured his release at the ignominious price of paying a world record sum for bail after a magistrate demanded a bond of €100m (£90m) to allay fears that he would climb into his private Falcon jet (he holds a pilot's licence) and flee justice.
What is Meinl accused of? —
The alleged financial scandal concerns Meinl European Land (MEL), a property investment fund focused on central Europe which reaped rich rewards during the height of the property boom. But some 60,000 Austrians who had paid into the fund, which was owned by Meinl Bank, lost money when MEL's share price plunged from €20 to just €3 during the financial crisis and investigators moved in, describing the alleged fraud as "huge" and "highly complex".
Media coverage in Austria has focused on claims that Mr Meinl, who trained at Bear Stearns, the now-defunct New York investment house, used the family bank to secretly shore up the property fund by buying back shares.
What a pity! If Mr. Meinl had trained at Goldman Sachs he might have gotten away with it.