Cyprus Mail
Cyprus

Cobalt director indicted in Switzerland, in connection with money laundering (Update-1)

Cobalt

(Adds comment by Cobalt manager on internal due diligence procedures in 22nd paragraph)

By Stelios Orphanides

Meisterhans, the Swiss director of Cobalt, the new Cypriot airline, faces charges in connection with two cases of financial-related offences in Switzerland and is also being investigated in connection with a third case.

Authorities in Switzerland indicted Meisterhans, a Cobalt board member, on May 20 last year of “aggravated money laundering, securities fraud and negligence in financial operations,” according to an order issued by senior US district judge John E Steel and following an ex parte motion for a temporary restraining order and preliminary injunction on June 1, 2015. The injunction claimed that without Meisterhans, described “as founder and principal” of Sinitus AG, a Swiss financial services company, Florian Wilhelm Juergen Homm, German national, and his ex-wife Susan Elaine Devine, a US citizen born in Brazil, would have not been able to launder the proceeds from the so called “Penny-Stock Scheme”.

Investors of Absolute Capital Management, an investment management company at which Homm was chief investment officer, suffered losses in excess of $200m when he conspired with others from at least September 2004 to September 2007, and used the company’s funds as vehicles to manipulate stock, the US court order said. Homm, who a decade ago was one of the shareholders of German football club Borussia Dortmund and faces a term of up to 225-year prison term in the US, benefited with $115 million from the scheme. He is also wanted by Swiss authorities. Investors offer a reward of €1.5m in cash for information that will lead to his arrest. Homm is believed to live in Germany and often appears in television interviews there.

Meisterhans, transferred more than $17m to accounts accessible to Homm and Devine, while Homm was hiding in 2007 and 2008, and “facilitated Devine’s money laundering activities by sending Penny Stock Scheme proceeds via complex routes through at least a dozen countries, employing false identities, using offshore companies, and executing transactions in cash, gold and fine art,” the order said.

The Office of the Swiss Attorney General (OAG) confirmed to the Cyprus Business Mail that it had filed three indictments against Meisterhans without specifying their nature or the exact time he was indicted. One of the three indictments “was rejected on the grounds that investigations are still ongoing against two other suspects in the same matter and that all three persons should be tried together in order to fulfil the principle of unity of judgment and avoid the possibility of contradictory outcomes,” said Linda von Burg, a spokesperson at the Berne-based OAG, in an email response.

On October 17, 2014, FINMA, the Swiss Financial Supervisory Authoritiy, ordered the liquidation of Sinitus AG and the procedure was completed on February 2, 2015, according to its website. FINMA, which also froze Sinitus assets worth CHF24m (€22m), was not immediately available for a comment. The chairwoman of the Cyprus Securities and Exchange Commission, Demetra Kalogerou, said that her agency which supervises financial services firms had no information on Meisterhans or Sinitus.

MOKAS, Cyprus’s anti-money laundering unit at the republic’s Law Office, said that it will check related information forwarded by the Cyprus Business Mail and that it may get in touch with other services. It is noted that Meisterhans has not been convicted for any offence.

Cobalt logoOn Tuesday, Cobalt received its commercial licence from the Air Traffic Licensing Authority (ATLA) which allows it to sell tickets to passengers, and announced that it would begin its flight programme on July 7. Alecos Michaelides, permanent secretary at the transport ministry and chairman of ATLA said that the licensing body was unaware of the indictments.

Still, since Meisterhans “has not been convicted, we couldn’t take into account anything, there is a principle that everyone is not guilty unless the opposite is proven,” Michaelides said in a telephone interview on Thursday. On the other hand, “it would be very naïve for the administration in Cobalt to tolerate someone in the board who might have been involved in this type of offences. It would be suicide”.

In case Swiss justice convicts Meisterhans for any of the above felonies, “things will be different and we may ask for his removal from the board,” the ATLA chairman said adding that in case he refuses to step down “we shall consider together with the Law Office all available options. It would be unwise and it surprises me if indictments have been filed against him and he is a member of the board”.

Transport Minister Marios Demetriades told the Cyprus Business Mail question that “whoever has evidence suggesting that a person is unsuitable as a member of the board of directors has to submit it to the committee which is in charge”.

According to article 6 of the European Council Regulation 2407/92, authorities may suspend or revoke the commercial licence of an airline when one of its directors or executives commits a criminal offence or in the event of serious professional misconduct.

Urs MeisterhansIn a telephone interview, Meisterhans dismissed information about his indictment and described as “rumours” information to the contrary. “I can confirm that I have never been indicted by any authorities, neither (sic) in Switzerland or anywhere else”.

Meisterhans “would have never have accepted the board membership in Cobalt” if he had been indicted, he said adding that Cobalt has done its due diligence, which “confirmed that there is no indictment pending or passed against me”.

Meisterhans said that he was not aware of the reasons that led to the liquidation of Sinitus AG by FINMA as he had left the company and sold his stake in it in 2013. The website of Sinitus AG, sinitus.ch now diverts to sinitusgroup.com. A Cyprus Business Mail call to the telephone number listed in the “contact us” section of the website was answered by Meisterhans personally. When asked repeatedly about his role in Sinitus AG, Meisterhans declined to respond adding that he was not the firm’s managing director. “This is all irrelevant,” he said. “What happened with the company after I left is not my responsibility”.

Cobalt Gregory DiacouThe chairman of Cobalt, Gregoris Diacou, who is according to the company registrar also the only Cypriot national director of Cobalt which defines itself as Cyprus’s national carrier, said that he could not answer questions related to a possible indictment of Urs Meisterhans.

“I am not going to answer to such things and it is not my business,” said Diacou, who is also an advisor to DIKO chairman Nicholas Papadopoulos on privatisations, in a telephone interview on Thursday. “I have a certificate of clean (criminal-)record”.

The airline’s shareholders are according to an online search at the company registrar, Pictet Capital Ltd, owner of 808,500 regular shares, AJ (Cyprus) Holdings Ltd with 808,500 regular shares, and Balneria Holdings Ltd with 33,000 regular shares. AJ (Cyprus) Holdings Ltd is in addition owner of the 26.400,000 issued “Class A” shares. Regular shares have voting rights while the rest has none.

Diacou appears as the owner of Pictet and so in control of 49 per cent of the airline’s voting rights. Meisterhans said that he is not “directly or indirectly a shareholder in Cobalt”.

Balneria is owned by the British Virgin Islands-based Integrity Overseas Ltd and its director is the Austrian Guenter Eibel, also member of Cobalt’s board. AJ (Cyprus) Holdings Ltd is owned by Hannice Investment, also based in the British Virgin Islands, and one of its directors, the British national Patrick Thomas Carrol is also sitting in the airline’s board of directors.

The Cyprus Business Mail understands that AJ (Cyprus) Holdings Ltd represents China’s state-owned Aviation Industry Corporation, also known as AVIC.

On Friday, a manager at Cobalt said that the airline had nothing to do with the report on Meisterhan’s indictment. “It is an issue concerning a member of the board,” Philokypros Rousounides, senior vice president of corporate affairs said on the phone.

He added that the airline applies strict due diligence procedures, which are repeated every four months and include the re-submission of criminal records by both workers and executives or directors.

Swiss Attorney Office

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