Austria launches “CSI Hypo” to probe failed bank

February 19, 2010

VIENNA, Feb 19 (Reuters) – Austria’s finance ministry has set up a 100-strong group of investigators to find out what led to the near collapse of Austria’s No.6 bank Hypo Group Alpe Adria before it was nationalised last year, it said on Friday.

The team will consist of legal and banking experts from Austria’s central bank, finance ministry, attorney general, audit court and from Hypo itself, Finance Minister Josef Proell told Austrian state radio ORF in an interview.

“What they’ll find I don’t know,” Proell said. “But that not everything went well there is pretty obvious … We will turn every single receipt, and if we find anything, we’ll prosecute.”

The group, which Proell dubbed “CSI Hypo” alluding to the popular television series about U.S. crime scene investigators, will work alongside Austrian state prosecutors and a special police unit already investigating the bank’s collapse.

Authorities in Germany and Croatia are also already looking into some of Hypo’s business and into the deal in which German state bank BayernLB [BAYLB.UL] acquired a majority stake in Hypo in 2007.

Austria took over Hypo Group Alpe Adria on Dec. 14 to avoid a collapse that authorities believed could have undermined trust in eastern European banks and in government support for state-backed lenders.

BayernLB, then Hypo’s majority owner, gave away its stake for a nominal 1 euro and injected a final 825 million euros ($1.11 billion) into the bank under the deal with Austria.

The troubled state-owned bank has written its ill-fated Hypo investment off to the tune of 3.7 billion euros in the meantime.  ($1=.7410 Euro) (Reporting by Boris Groendahl; Editing by Jon Loades-Carter)

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