Banker jailed for breach of trust

Press, 9 July 1986, Page 35

Banker jailed for breach of trust

NZPA-Reuter Frankfurt A West German court has sentenced former private banker Count Ferdinand von Galen to 45 months in jail for serious breach of trust in the country’s second largest bank, failure. Presiding judge Gernot Bbckelmann said von Galen’s neglect of his duties caused some of his partners in the once prestigious private bank, Schroeder, Muenchmeyer, Hengst und Co (SMH), damage of 50 million marks ($NZ42.55 million). Von Galen, 50, was a

senior partner in SMH, which had to be saved by a consortium of West German banks when it was found over-exposed to the now-bankrupt construction equipment group, IBH Holding AG, in November, 1983. The rescue cost 700 million marks (5NZ597.5 million). Last week, the prosecution dropped further charges of fraud against SMH creditor banks after von Galen had admitted breach of trust. Von Galen’s face showed no emotion as the verdict was read out, but he told reporters later: “I

have been convicted as a failed businessman . and not as a defrauder; everything else is only of marginal interest to me.” Barring an appeal from either side, the sentence will come into force next week. Von Galen had already served 15 months in custody before being released on 10 million marks (SNZB.SI million) bail in March. The period will be counted against his sentence. Bockelmann said von Galen was not a whitecollar criminal in the normal sense since his aim was not to enrich himself.