News:

Register to attend our live meetings.

Main Menu

Austria: No More OeBS Banknotes for Asia

Started by Bimat, October 29, 2011, 01:02:33 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

Bimat

Austria Money-Printing Management Dismissed by Central Bank

By Jonathan Tirone and Boris Groendahl

Oct. 28 (Bloomberg) -- Austria's Central Bank dismissed management at Oesterreichische Banknoten- und Sicherheitsdruck GmbH, the subsidiary charged with printing the country's banknotes.

"Suspicions of unlawful actions" were uncovered during a routine audit, the bank in Vienna said in an e-mailed statement today without elaborating. The bank's spokesman wasn't immediately available via telephone.

The subsidiary, which also designs and prints notes for African, Asian and Latin American countries, was founded in 1816, according to its website. Robert Kalina, the award-winning currency designer who created the euro area's bills, worked at the company.

The bank referred the case to the "relevant authorities" and said it is committed to a "full investigation," according to the statement.

The managers may have expensed items including Viagra and may have paid bribes to get orders from Syria, Der Standard newspaper reported, citing an internal review of the Austrian central bank.

The auditors found "unusual" expenses of as much as 600,000 euros ($850,000), which included charges claimed for furniture in a Romanian apartment as well as for Pfizer Inc.'s impotence drug, the Vienna-based daily said. They also found payments of as much as 14 million euros made to win contracts to print Syrian bank notes, the paper reported.

The newspaper didn't identify the managers who were fired over the accusations, adding that they declined to comment.

Source: Business Week
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

chrisild

The story is true, but the conclusion in the headline ("no more banknotes" etc.) is a little too dramatic. ;) Here are two articles in German; ORF is the major Austrian TV/radio network, and the Standard article is what Business Week referred to. In other words, the will be a new OeBS management, and they will continue to, errm, make money.

http://orf.at/stories/2086712/2086710/
http://derstandard.at/1319181529813/Nationalbank-Gelddrucker-unter-Schmiergeldverdacht

PS: Loved the comment on "stabilitätsfördernden Aufwendungen für Viagra" - stability enhancing expenses on Viagra. :)

Christian

Bimat

Quote
The story is true, but the conclusion in the headline ("no more banknotes" etc.) is a little too dramatic. ;)
:D :D

LOL You are correct! :D :D

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

chrisild

The OeBS will indeed no longer make banknotes ... for countries in Asia/Arabia, that is. Topic title adapted. :) According to the OeNB (Austrian central bank, the "parent" of the OeBS) they will focus on European customers now. Four suspects - OeBS manager Michael Wolf, a marketing manager and two lawyers - have been arrested in this case.

Christian

Bimat

I don't think OeBS is as popular as De La Rue when it comes to printing banknotes for other countries. ;) (And if I'm not wrong, De La Rue is a privately owned company, unlike OeBS?) So not much to lose for OeBS IMO..

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

chrisild

Right, in Austria both the "paper money makers" (OeBS) and the "coin makers" (Münze Österreich, Austrian Mint) are parts of the central bank. Guess this also means that they can more easily deal with the result of focusing on fewer markets than a private company such as De La Rue could. In 2010 the OeBS made a profit of €2.7m - its current "problem" (apart from the bribery scandal ;) ) is that it produces about 250 million euro notes per year but needs to produce roughly twice that quantity to be profitable.

http://derstandard.at/1319182062649/Nationalbank-Tocher-Banknotendrucker-OeBS-Vier-Personen-verhaftet
http://diepresse.com/home/wirtschaft/economist/706073/NationalbankDruckerei-zieht-sich-aus-Arabien-und-Asien-zurueck
(Articles in German)

So in one way or another, they need to make more money than they currently do. OeBS does, as usual in that business, not publish the names of its current customers. But in the past they have made notes for Croatia, Bosnia, Georgia, Azerbaijan, Malaysia or Singapore. That list is likely to become shorter ...

Christian

chrisild

The corruption/bribery investigations in Austria regarding the OeNB, the mint and the OeBS are still in full swing, but some details are even amusing. :) According to an article that Die Presse published yesterday, the Austrian Mint had simply forgotten to put a date on the qapik coins for Azerbaijan. But instead of fixing the mistake, they were able to convince their customers that this bug could also be a feature: The undated coins could be issued for many years without appearing to be outdated. Hehehe.

Christian

Figleaf

Fun story :). The Azerbis should have pressed for a hefty discount, of course.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

chrisild

They sure got their "discounts". The Austrian central bank and its subsidiaries (OeBS, mint) regularly made payments to a "service" company named Venkoy in Panama, apparently a shell or dummy corporation. Venkoy would transfer some of the money to the relevant people ;) in, say, Azerbaijan or Syria. The Austrian Mint is also a sponsoring member of the GÖAB (Society for Austrian-Arabic Relations) and pays much more than the regular membership fee. Whether that is kosher or not, remains to be seen.

The above is based on a "Standard" article published today. The picture of the dog on that page seems to be a stock photo, by the way: In the first paragraph of the article they write about the latest "employee" of the OeBS, a labrador (!) named Dusty whose job it is to keep paper money from "disappearing" ...

Christian