Ex-Hess directors face $6.9m damages claim

Former Hess directors Christoph Hess and Peter Ziegler may have to pay $6.9 million (€5 million) in damages to investor Holland Private Equity (HPE), which claims it suffered massive losses after the firm was floated on the stock market on the basis of false accounts.

Although a verdict has yet to be reached on whether Hess and Ziegler are liable, the regional appeal court of Karlsruhe has taken interim measures, ordering the funds to be seized.

The court said HPE has made a credible case that it is owed $6.9 million damages for losses incurred when it invested in the German luminaire maker in 2012. A further claim for damages relating to an earlier investment of $17.3 million (€12.5 million) in 2011 was rejected.

The pair served as CEO and CFO of the company, and Christoph Hess (pictured) is the grandson of its founder, Willy Hess.

Hess went bust early last year and was later bought out of insolvency by Nordeon – a Dutch-owned spinoff from Philips. A report from administrators revealed that US$62 million (€45 million) of Hess’s reported profits had actually never existed.

State prosecutors are now conducting ‘extensive’ criminal investigations into the activities of the two sacked directors, together with 20 other people, on suspicion of giving false financial statements and misleading two banks about the financial circumstances of the company and the disposition of loaned funds.

In an interview with the Südkurier newspaper last year, administrator Volker Grub described the case as being like something from a detective story.

More than 100 jobs were lost at Hess following its insolvency.

Photo: Christoph Meinschaefer

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