The head of Austrian bank Raiffeisen has resigned over a series of personal property deals.
Herbert Stepic denied wrongdoing in using front companies in the Caribbean and Asia to buy flats in Singapore in 2006 and 2008, but said he was stepping down to spare his bank from negative publicity .
The deals – which were exposed by the Offshore Leaks investigative journalism project – are now under investigation by Austria’s central bank, its Financial Market Authority watchdog and Raiffeisen, to see if any law or internal guidelines were violated.
Stepic, who has very much been the public face of the bank, told a news conference that the Singapore property deals were above board because he had made the investment with money taxed in Austria and had also paid tax on revenue from a sale.
He insisted he did not need to notify his bank or regulators about three apartments in Singapore he bought via ‘project companies’ set up with the help of Swiss bank UBS in the British Virgin Islands and Hong Kong.
As he announced his resignation, the 66-year-old said he was proud of what he had accomplished in four decades at Raiffeisen, creating tens of thousands of jobs in the former Communist East and making 800 million euros in profit over the past five years as the financial crisis raged.
Raiffeisen is central and eastern Europe’s second-biggest bank with 60,000 staff in 17 countries.
The FMA investigated Stepic last year over a reported property deal in Serbia financed with a loan from another bank that went sour, but the watchdog’s spokesman said it took no action because the investigation showed he had withdrawn from the project.
Austrian bank executives can, in principle, invest their own money as they see fit as long as they uphold required standards for orderly business and personal reliability, the FMA says.
But those who use deals to circumvent the law, avoid tax or launder money are subject to review. Whether bankers need to inform employers of deals transacted on their own account depends on banks’ internal guidelines, it adds.
Stepic made headlines in April when he returned two million euros of his 2012 pay package, saying he felt morally obliged to cut his overly generous compensation.