🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Vanished communist cash still causing pain for Swiss bank Baer

Published 12/05/2019, 08:56 AM
Updated 12/05/2019, 09:01 AM
Vanished communist cash still causing pain for Swiss bank Baer
BAER
-
UBSG
-

By John Miller

ZURICH (Reuters) - Thirty years after the Berlin Wall fell, private bank Julius Baer (S:BAER) is still fighting German government efforts to recover hundreds of millions in East German cash that vanished via Swiss accounts after the communist state collapsed.

Julius Baer said late on Wednesday it had set aside 153 million Swiss francs ($153 million) to fight the case, but vowed to appeal a Zurich court's ruling this week that withdrawals dating back nearly three decades that the German government contends were illegal, should be returned.

The money is part of a stash allegedly worth hundreds of millions of euros that an East German-registered company that handled import-export business with the West, Vienna-based Novum Handelsgesellschaft, helped funnel out of East Germany.

Julius Baer was swept up in the case because it bought Zurich-based Bank Cantrade from UBS in 2005, which the German government contends allowed unauthorized withdrawals from Novum accounts between 1989 and 1992.

"Julius Baer will claim for reimbursement (from UBS) of any finally awarded amount," Zurich-based Baer said in a statement. "Julius Baer has always contested and continues contesting the claims."

UBS (S:UBSG) declined to comment.

'RED FINE'

Baer is just the latest European money manager to be snared in this long-running post-Cold War dispute over communist cash, which Novum's ex-director, an Austrian communist named Rudolfine "Red Fine" Steindling who died in 2012, was accused of moving into Austrian Communist Party accounts that later went missing.

In 2013, UniCredit's Bank Austria took a profit hit after the German government demanded 254 million euros ($280 million) that Steindling was alleged to have moved via Novum accounts at a Swiss subsidiary. [https://reut.rs/389fZEg]

In the ongoing Swiss case, the Zurich Court of Appeals originally sided with Julius Baer in 2018, but reconsidered its verdict this year when the Swiss Federal Supreme Court sent it back to be reheard.

The Swiss high court concluded there were "obvious shortcomings" in Bank Cantrade's handling of the Novum funds.

The German agency seeking to recover the money, called the Federal Office for Reunification-related Special Tasks (BvS), could not immediately be reached for comment.

The Austrian Communist Party did not return an email and phone call seeking comment.

($1 = 0.9972 Swiss francs)

($1 = 0.9073 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.