The suspicion of gang-related embezzlement at the insolvent Frankfurt-Hahn Airport has now been confirmed. Findings are based on two raids in which documents and files of various companies were seized. The prosecutor’s office presented the outcome of the official investigations at the end of last week, unveiling scandalous practices.
The accusations weigh heavily on Frankfurt-Hahn’s financial management and various companies involved in the alleged subsidy fraud. The prosecutor's office in Koblenz, southwest Germany, speaks
of “gang-related embezzlement, subsidy fraud, and delayed insolvency,” involving bankrupt Hahn Airport. All accusations are based on findings following two raids at the airport combined
with testimony hearings. During searches, the investigators targeted 4 individuals responsible for 6 companies, including an airport business partner.
Initial results of the investigation presented by the prosecutor’s office show that the alleged subsidy fraud has caused the state of Rhineland-Palatinate financial damages of at least 400,000 euros.
Suspicion of insolvency fraud
Four of the five accused individuals are suspected of having caused “asset losses on a large scale” based on a “joint criminal plan of action” executed by organized fraud and gang-related embezzlement between July 2017 and May 2020. Affected companies were thereby inflicted with “asset losses of great magnitude,” prosecutors emphasize. In addition, three of these suspects are alleged to have misused funds belonging to companies doing business at Hahn, with two of them channeling money into their own pockets. Furthermore, on two occasions the trio is alleged to have arranged to pay bills to a company for fictitious activities. This suggests that the company in question, or at least its management, was part of the gang. Prosecutors also hold that one company’s rental income had not been accounted for, which is regarded as tax fraud.
Criminal network was at work
So far, the financial damage caused by misuse and embezzlement has not yet been fully quantified. The public prosecutor's office also accuses four defendants of subsidy fraud. They are alleged to have wrongfully applied for state aid in order to finance dodgy projects. In the case of 5 Hahn companies, three defendants are initially suspected of having voluntarily delayed bankruptcy proceedings in the summer and fall of 2021.
Hahn Airport filed for insolvency in October 2021. The former Chinese majority shareholder HNA is also bankrupt. HNA had acquired 82.5% of the airport from the German state of Rhineland-Palatinate in 2017, during a buying spree, paying around 15 million euros. The state of Hesse still holds 17.5%.
In 2021, Hahn handled 242,862 tons vs 171,000 tons in 2019. Main freight carriers utilizing the airport are Silk Way West Airlines, Aerotranscargo, SkyGates, and Magma; all operating B747Fs.
Meanwhile, the search for new investors is underway. According to the provisional insolvency administrator, Jan Markus Plathner, “there is still a keen interest in Hahn.” On 26JAN22, the expressions of interest are to be qualified in order to separate the wheat from the chaff. Karl-Heinz Heinrich, chairman of the works council, said he was “cautiously optimistic” that Hahn had a chance of survival as an airport. Insolvency administrator, Plattner also expressed a positive view. Flight operations could be maintained in February, he said. However, a long-term solution would depend on a reduction in losses - and that “the investor process can be promptly completed, and quickly be officially approved.”
The actual insolvency proceedings are to be opened on 01FEB22. The temporary insolvency benefits for employees will then have already been paid for three months. The airport would have to pay the February wages and salaries out of the company’s coffers.
Lufthansa loses legal dispute
Last Thursday (20JAN22), Lufthansa finally lost a year-long legal battle over state aid paid to Hahn. The European Court of Justice (ECJ) rejected a lawsuit filed by the Lufthansa Group against financial support provided by the state of Rhineland-Palatinate to keep Hahn afloat. Among other things, the case concerned a credit line of 45 million euros. In addition, the EU judges ruled that Lufthansa must bear the procedural costs of the state and the EU Commission.
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