The former Bank Meinl has been dogged by allegations over money laundering.
European regulators moved to shut one of Austria’s best-known financial institutions on Friday, bringing to a close almost a century in banking for the Meinl dynasty. Austria’s financial regulator, the FMA, said that the European Central Bank had decided to terminate a banking licence for Anglo-Austrian Bank, which until a hasty rebranding in June had been Bank Meinl. The decision will take effect immediately, the FMA said, amid ongoing concerns over compliance failures and allegations of money laundering that have dogged the bank in recent months. Bank Meinl is as Viennese as the city’s famous Kaffeehäuser: the Meinl family made their fortune as the great importers of coffee under the Habsburgs, and Meinl blends are still brewed and served on the distinctive silver trays of Vienna’s urban salons. Meinl am Graben, opened in 1950, is Vienna’s best-known luxury food store — a multi-story emporium of tea, coffees, biscuits and chocolates a stone’s throw from St Stephen’s cathedral in the medieval city centre. In a statement posted on its website, the bank said it had already decided to withdraw from the banking business. “Today’s decision by the ECB will not change anything,” the statement read. “Objectively speaking there is no reason to withdraw the licence,” it continued, adding that the bank had almost “completely solved” past problems and that its capital base was solid. “Legal steps are being evaluated,” it said. Anglo Austrian has the option to appeal against the ECB decision.
The bank, owned by Julius Meinl V — an outspoken dealmaker known simply as “the fifth” within the family’s sprawling network of interests — has been run separately from the retail businesses which bear the family’s name since 1998. Originally set up to meet the financial needs of employees in the Meinl food empire in 1923, the bank was an early target of the Nazis after their takeover of Austria in 1938. The Meinls were given sanctuary in Britain, and became a valuable intelligence asset for the British government, through their still strong connections in the European business world. The Meinl’s rapidly rebuilt their business empire after the war. Since Julius Meinl V’s ascension to head the bank in 1983, its fortunes rose swiftly — and fell with equal drama. At its peak, in a boom which Mr Meinl spearheaded in the early 2000s, the bank and its subsidiaries generated hundreds of millions in revenues, with interests and investment projects in operation across central and eastern Europe. The past three years, however, have been more troubled.
Since 2016, Ukrainian authorities and their counterparts in Austria have been investigating the bank for its alleged role in helping to launder tens of millions of euros on behalf of individuals and entities connected with former Ukrainian president Viktor Yanukovich. In an earlier statement, the bank said claims against it were “absurd” and that it was the victim of a politically motivated “media campaign” against it. The bank also became embroiled in Brasil’s giant Odebrecht corruption scandal. In 2017, leaked documents revealed Meinl’s Antigua subsidiary was used by men at the centre of the Odebrecht scheme to process millions in illicit transactions. Meinl said it has “no managerial control or operational insight” of the transactions because it had sold a 51 per cent stake in the entity which bore its name in 2010. This year, Austrian regulators fined Meinl Bank €500,000 for “breaches of due diligence requirements for the prevention of money laundering and terrorist financing.”
A separate action sought to remove influential members of the bank’s board. While it is unclear how Bank Meinl will be able to continue to operate in financial services given the ECB’s decision, Mr Meinl and his bank have proved tenacious in the face of damaging crises in the past. The collapse of a €5bn property fund run by the bank in 2009 led to the arrest of Mr Meinl on suspicion of fraud. He made headlines shortly after by paying a world-record bail bond of €100m — higher even than that set for Bernie Madoff — although he was forced to relinquish his passport. Mr Meinl holds British citizenship, as do others in the family, after the family settled in Britain. The family owns an 800-acre estate near Upton Scudamore in Wiltshire. Mr Meinl told the UK’s Daily Telegraph newspaper at the time of his arrest he was probably “the most hated man in Austria”. The bail was later refunded to Mr Meinl and the allegations against him were dropped. Austrian authorities brought a second case against the financier in 2014, in relation to a €212m dividend the bank paid out to him and other shareholders. Mr Meinl had fraudulently taken the money, they said. The charges were shortly thrown out by a Vienna court.
Source: https://www.ft.com/content/b3ace8be-07c8-11ea-9afa-d9e2401fa7ca