2024-12-12 17:23:00
The examination into the alleged million-dollar fraud at the Munich textile company Sympatex took a new turn shortly before its conclusion. The arrest warrant against owner Stephan Goetz was suspended under conditions after nine months. The “Handelsblatt” reports it.An indictment against Goetz and othre defendants is said to be imminent.Goetz has recently shown a willingness to collaborate, he continues. In a civil case he corrected previous statements about the events. It is not known whether Goetz has already been released from custody on bail. In any case, the second owner of Sympatex, Stefan Sanktjohanser, would be detained.
Furthermore, another suspect, a well-known restructuring consultant from Munich, was arrested a few days ago, the Handelsblatt continues. This is a managing partner of One Square Advisors (OSA) who was arrested at a German airport due to strong suspicion and risk of flight and concealment.
Director of One Square Advisors vehaftet
When questioned, the consultant’s lawyer declined to comment on the arrest and charges and referred to the ongoing proceedings. On behalf of One Square Advisors, its CEO Wolf Waschkuhn said he was convinced that the accusations against the manager would prove to be unfounded. One Square Advisors has been involved in numerous defaults and restructurings of so-called mid-sized bonds, primarily as a common representative of creditors, but also as management consultants, sometimes both at the same time. This has frequently enough attracted criticism, especially as in many cases creditors have received little or nothing in return for their credits.
Sympatex produces outdoor clothing and positions itself as an environmentally friendly choice to the premium supplier Gore-Tex. In 2017 the company, then operating under the name Smart Solutions Holding, offered creditors a bond worth 13 million euros, about a year before maturity, 10% on their credits. This is only possible because the investor who buys Sympatex for one euro is willing to raise the necessary 1.3 million euros. When the bond was issued in november 2013,Symaptex presented itself as “the world’s leading specialty supplier of high-tech functional materials” with a material that had ”superior product properties” and “clear potential” and with opportunities of growth in 18 already developed countries,high-margin business in the Contract & Workwear sector.
Fraud, market manipulation and breach of trust
The company, in fact, had anticipated a loss carryover of around 50 million euros despite sales tending to stagnate. The economic data communicated by Sympatex have worsened substantially and the production plant in Zittau has also been sold. The creditors were then presented with the offer as the best solution, because they were told that 10% was more than in bankruptcy. The creditors accepted without knowing who the investor in question was. The sale didn’t happen, but the compensation did.
Today the prosecutor’s office believes that investors were deceived about the financial situation. The authority is investigating a total of 14 suspects, the charges include fraud, market manipulation and breach of trust. As far as is known, all the defendants have denied the charges.
One square Advisors also acted as joint representative in the Sympatex case. The arrested councilor played an essential role. The public prosecutor is convinced that he intentionally harmed investors, writes the “Handelsblatt”. Goetz,Sanktjohanser,the One Square consultant and others allegedly enriched themselves at the expense of their creditors. Fraud and market manipulation would therefore be considered criminal offences.
They are said to have bought bonds thru straw people to secure a majority in the haircut vote.According to the Debt Securities Act, not much is actually needed for this purpose. In a first vote, 50% of the volume in circulation must be represented. In reality this quorum is never reached. The second meeting reaches a quorum when a quarter of the outstanding bonds are represented. Most resolutions require a qualified majority (75%), so that virtually anything can be implemented with 18.75% of nominals outstanding. In the case of Sympatex, only a nominal amount of around 2.4 million euros was enough. Though, the bond had been trading well below par value for a long time.
How could the outcome of the Sympatex case impact corporate governance in the textile industry?
Time.news Interview: Unraveling the Sympatex Fraud Case
Interviewer (Time.news Editor): Good afternoon, everyone! Today, we have a very special guest joining us—[Expert’s Name], a renowned financial crime investigator and expert in corporate fraud. We’ll dive into the recent developments concerning the alleged million-dollar fraud at Sympatex, a Munich textile company. Thank you for joining us, [Expert’s Name]!
Expert: Thank you for having me! it’s great to be here to discuss this captivating and troubling case.
Interviewer: Let’s start with the key figure in this unfolding drama,Stephan Goetz,the owner of Sympatex. Reports suggest that the arrest warrant against him has been suspended after nine months of investigation. What does this indicate about the nature of the investigations?
Expert: in legal terms, the suspension of the arrest warrant suggests that the prosecution is weighing the evidence against Goetz and possibly believes that he might be more cooperative going forward. His willingness to correct previous statements could imply that he is seeking a plea agreement or is trying to mitigate some of the legal repercussions. It’s a significant shift that often signals negotiations between the suspect and the authorities.
Interviewer: Interesting.So, you’re saying there might be more to Goetz’s apparent cooperation? Could this perhaps lead to a broader investigation?
Expert: Absolutely.His cooperation might provide key insights into the company’s practices and possibly implicate othre individuals or entities involved in the alleged fraud. This is further complicated by the recent arrest of a restructuring consultant from One Square Advisors, which indicates that authorities are widening their net as they connect the dots between various players in this case.
Interviewer: Speaking of One Square Advisors, can you shed some light on the role they play in situations like this? why would a restructuring consultant be implicated?
Expert: Restructuring consultants like One Square Advisors often work with companies facing financial challenges, and they act as intermediaries between creditors and management. When things go awry,they can become targets of scrutiny. If they were involved in guiding Sympatex’s actions during the alleged fraudulent activities, it raises serious ethical questions about their practices. The fact that their managing partner was arrested for suspicion of flight indicates that investigators believe there’s a considerable risk that critical evidence could be tampered with or hidden.
Interviewer: Fascinating—and concerning! The legal repercussions seem quite severe.what implications does this case have for the broader textile industry in Germany,especially if fraud becomes commonplace?
Expert: Such high-profile cases can have a chilling effect on investor confidence and consumer trust.If this fraud is proven, it could lead to tighter regulatory scrutiny across the entire sector. Innovation might be stifled as companies redirect resources towards compliance rather than growth. On the flip side, it can also serve as a wake-up call for businesses to adopt more clear practices and strengthen their governance.
Interviewer: Definitely something to keep an eye on. Before we conclude, are there any lessons that other companies can take from the Sympatex case so far?
Expert: Yes, several! First, the importance of transparent financial reporting cannot be overstated.Companies should foster an environment where ethical practices are prioritized. second, having robust compliance frameworks and internal audits can definitely help catch any discrepancies before they escalate into larger legal issues. Lastly, fostering a culture of ethical behavior at all levels can deter misconduct and promote a healthier corporate environment.
Interviewer: Valuable insights, [Expert’s Name]. It seems clear that the upcoming months will be critical in revealing the full scope of this case. Thank you for your expertise and your time today!
Expert: Thank you for having me! I look forward to seeing how this situation evolves.
Interviewer: And thank you to our audience for tuning in.Stay informed with Time.news for the latest updates on this and other significant stories. Until next time!