With the insolvency of what was once the world’s largest pellet manufacturer from Wismar in 2016, thousands of investors lost their money – a total of 270 million euros. The public prosecutor’s office accuses the 66-year-old managing director of 87 criminal offenses. His defense attorney denies all allegations.
Seven years after the insolvency of German Pellets GmbH in Wismar in Mecklenburg-Western Pomerania, a lawsuit against the former co-owner and managing director has begun in the Schwerin district court. The public prosecutor accuses the 66-year-old of having known about the company’s financial difficulties since March 2015, but he only filed for bankruptcy in February 2016. The company saw itself as the world market leader in 2016. According to the Protection Association of Investors, around 17,000 small investors in Germany lost 270 million euros as a result of the insolvency. They had invested their money in the form of bonds and profit participation certificates in the company that produced and traded wood pellets for heating.
About 1,500 creditors registered claims of around two billion euros, as insolvency administrator Nicolas Rebel announced on request. In detail, the public prosecutor’s office accuses the former managing director of 87 criminal offenses, including delaying bankruptcy, credit fraud, bankruptcy, embezzlement, tax evasion and the withholding of wages. Also accused are the 39-year-old daughter of the managing director and a 41-year-old former executive of the company.
According to the indictment, German Pellets continued to order goods and services despite its insolvency, provided 3.7 million euros for the purchase of a Belgian coal-fired power plant and gave a bank false inventories that served as security for loans. Furthermore, the company is said to have made fraudulent sales and buybacks, submitted false advance sales tax returns and failed to pay social security contributions for employees amounting to 176,000 euros. Of the small investors affected, only those who have subscribed to bonds and participation certificates worth EUR 7.2 million since spring 2015 are included in the indictment.
The former managing director is accused of having made false statements to them in view of the alleged insolvency. The defendants did not comment on the allegations. In a so-called opening statement, a defense attorney for the main accused dismissed the allegations as unfounded. “The allegations are inaccurate in the form read out. In particular, the accusation that the three accused had legally formed a gang is inaccurate,” said the defense attorney. The bankruptcy came after a long-term lender surprisingly withdrew in January 2016.
The court, meanwhile, pointed out that some charges could be dismissed because they are of little relevance to the whole trial. Dates have been set for the trial through August.