Austrian businessman Wolfgang Flottl, who has owned a home in Tucker’s Town, has been linked to a banking scandal, which led to the resignation of the bank’s chairman in Vienna last week.
The trade union-owned bank Bawag was the subject of an investigation in the early 1990s when it was found that Mr. Flottl’s father Walter, who ran Bawag from 1972 to 1995, had failed to inform the bank’s supervisory board of investments the bank had made in funds run by Wolfgang Flottl.
According to the London-based Times Online, a political row ensued but the next bank CEO continued to invest in Wolfgang Flottl’s fund
There was more controversy for Bawag last year when it emerged that the bank had approved a $410 million loan to the CEO of commodities broker Refco just hours before the company announced it had hidden $430 million of bad debt, leading to Refco’s collapse.
According to Times Online, Mr. Flottl was responsible for establishing the bank’s relationship with Refco.
On Friday, Bawag chairman Gunter Weninger told a press conference he had concealed millions in bad loans and that he would be stepping down in April.
The bank’s losses emerged after U.S. investigations into the collapse of Refco.
Mr. Weninger said he had been told in 2000 of other losses “which could threaten the bank’s balance sheet”, but decided to keep the information to himself.
The loss concealed by Mr Wenginer were run up, according to Times Online, through “its disastrous investment” in funds run by Mr. Flottl. The bank said it might now sue Mr. Flottl in connection with the failed investment. Mr. Flottl is believed to have paid fewer visits to Bermuda in recent years. His home is located between the properties of American billionaire Ross Perot and Italian Prime Minister Silvio Berlusconi.
The Austrian businessman has interests in the U.S., where he attended Harvard Business School. His wife Anne is the granddaughter of U.S. president Dwight Eisenhower.
