Belfast Telegraph

Home News World

£90m bail for Briton blamed for collapse of Austrian economy

By Cahal Milmo

For nearly 150 years, the Meinl name has been synonymous with several pillars of Austrian civilisation – coffee, pastries and boutique merchant banking. Julius Meinl III, who fled the Nazis by emigrating to Britain before returning to rebuild his family's retail empire, adopted an uncompromising slogan: "Only the best."

Unfortunately, the current head of this Anglo-Austrian business dynasty is having to cope with a less illustrious reputation. The respected banking scion has suddenly become a toxic British import widely portrayed as the Viennese equivalent of Sir Fred Goodwin, the derided Royal Bank of Scotland chief executive.

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.

Mr Meinl, who took over as chairman of the Meinl Bank in 1983 at the age of 23 and presided over its transformation from a small private bank into a major international investment house and one of Austria's largest financial institutions, yesterday protested his innocence and his readiness to face the authorities.

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. Unlike RBS and Sir Fred, who has not faced any criminal investigation, Meinl Bank is not in debt and has not been given a public bailout.

Mr Meinl said: "I have been portrayed in Austria as all that is wrong with the banking sector. I cannot set foot outside my door at home because opinion is against me. Yet I have done nothing wrong. Do I look like the sort of man who is going to run away from my responsibilities or from Austria? I will return whenever the authorities want to see me. I am going to fight to clear my family name."

To that end, Mr Meinl has engaged a team of lawyers in London to fight the allegations against him and his bank, which has insisted its situation is "stable".

It is an unusual predicament for the Meinl family. From the humble beginnings of its first coffee roasting shop in Vienna in 1862, the company built up a network of high-end grocery stores and coffee shops across the Austro-Hungarian empire. When the Nazis annexed Austria in 1938, Julius Meinl III, who was married to a Jew, fled to Britain and the family became British citizens before he returned to Austria in the aftermath of the Second World War to resurrect the food, drink and banking business.

Under Julius Meinl V, whose father became an RAF fighter pilot, the family firm underwent a radical overhaul in the late 1990s with the sale of its then loss-making food business and the focus on financial services. The company held onto a flagship delicatessen in central Vienna and the coffee business.

Recession in brief

*Signs of improvement in construction sector

*Biggest bounce in consumer confidence for two years

*Scrap metal prices rise

*Fears of deflation as shop prices fall

Source: Independent

Belfast Telegraph


From Belfast Telegraph