Endgame for “Effenberg” Volksbank from Schmalkalden – Economy

It’s a bizarre power struggle that has been keeping the financial world in suspense for months: on the one hand, the banking regulator in Bonn and the umbrella association of cooperative banks in Berlin, and on the other hand, a recalcitrant one Volksbank in the southwest of Thuringia, more precisely in Schmalkalden and Bad Salzungen, which is making a name for itself with – to put it cautiously – daring deals. It’s about illustrious things like brothel properties and football deals, among other things.

In the meantime, the cleaners from the supervisory authority and the association have moved out, and a special representative from Bafin took over the issue in November Thuringia taken over, the former bank boss Stefan Siebert went into hiding. Also out is the most prominent employee – ex-soccer star Stefan Effenberg – as well as the supervisory board around the former Thuringian Prime Minister Dieter Althaus (CDU). In addition, the public prosecutor’s office is now also dealing with the events.

Is it just creative business practice or does the whole thing have criminal elements?

However, the problems of the lurching bank are far from being solved and this raises the question of whether the Federal Association of Volksbanks and Raiffeisenbanks (BVR) should have intervened earlier, as some of those involved say. The activity did not only take place under the Volksbank brand, which may have suffered scratches as a result. On top of that, it should a loss in the hundreds of millions accrued, which probably exceeds the bank’s equity capital and therefore probably has to be taken over by the 730 or so cooperative banks, as the group’s statutes stipulate. And it is also unclear: is this just creative business practice or does the whole thing have criminal elements? Is the sacked bank management even continuing to pull the strings in the background and possibly torpedoing the restructuring of the institute?

The BVR would prefer not to say anything about it at its annual press conference on Wednesday in Frankfurt. “It always hurts to read headlines like that,” admitted association leader Marija Kolak. However, the matter has no impact on the reputation of the Volksbank brand. Did the association intervene too late? Do customers and members have to expect losses? There are currently no answers to any of these questions. Just this much: the association assures that the Volksbank deposit insurance has worked perfectly for 90 years. Customers or members have never lost deposits or shares in the event of an imbalance.

A touch of East-West conflict

All of this is still a disgrace for the good Volks and Raiffeisen banks. If special administrator Christian Gervais, former board member of Volksbank Köln-Bonn, has his way, then Volksbank Schmalkalden will decide on a restructuring plan at its general meeting on March 26th in Erfurt and then place itself in the hands of the federal association’s security scheme. The bank will divide these, including the losses, among the Volksbanks. It should also be clear beforehand how much money is gone. The annual financial statements for 2022 have still not been certified.

It was there initially only the business with football clubs, which is the financial world also followed with interest beyond Thuringia. The bank financed player transfers. In 2018, the bank even hired ex-national player Effenberg. A third of all clubs in the first and second Bundesliga were customers at times. That always sounded strange. In the end, however, it was less the football business that caused problems for the bank than real estate deals and illustrious investments – including them Brothel properties in Oberhausen, loans for a water source in Greece or a fleet of agricultural machinery. Bafin listed the unpleasant details in an 81-page letter to the bank in the fall. The board of directors and supervisory board then quickly resigned from their positions.

In fact, Bafin had been trying in vain for a long time to dismiss former boss Siebert. The Mühlhausen public prosecutor’s office had already filed a case against him in 2018 because of the Suspicion of infidelity is being investigated because he is said to have taken advantage of the purchase of a property to the detriment of the bank. Years later, the authority stopped its investigation into the fine. Siebert always denied the allegations and was able to move on. In the meantime, however, the public prosecutor’s office in neighboring Meiningen is considering several criminal complaints, including one from the Bonn anti-money laundering authority Financial Intelligence Unit (FIU). There is currently no investigation into this, as a spokesman for the authority said, but there is an older case of tax evasion against Siebert, which was first reported on Handelsblatt reported had. Neither the public prosecutor nor Bafin wanted to comment further. Siebert left a request unanswered.

Effenberg is suing against his dismissal

It is far from clear whether everything will go as planned with the renovation. Because several bank members on site, including an ex-district administrator and other notables, are fighting for the sovereignty of interpretation at their bank. With 900 votes, the alliance has already caused a stir and is working on a “battle plan” for the general assembly at the end of March. A preparatory meeting in the Schmalkalden multi-purpose hall on Wednesday evening will take place due to the “great regional interest”. on Youtube transmitted.

There is also a touch of East-West conflict: reports can be heard from those around the supervisory board Thuringian newspaper Free Wort recently, the members felt blackmailed by the Bafin. The association and supervision are only concerned with ending a success story. The fact that ex-bank boss Siebert is behind the initiative is denied by those around him.

But what happens if the initiative prevails at the general meeting and prevents a restructuring agreement? You wouldn’t want to think about that at BVR. Because then the financial regulator may revoke the banking license. From now on, the members have to take care of their own “success story” and also bear the losses, it is said in association circles.

But the general assembly is not the special representative’s only construction site. The former employee Effenberg now has Dismissal protection suit against his dismissal submitted. The first hearing at the Suhl labor court is scheduled for March 20th. Interesting details could also come to light there.