Adria audit to determine collapse accountability


Ernst & Young have been awarded a contract by Adria Airways’ bankruptcy administrator to audit the former flag carrier in order to determine the responsibility its past owner, 4K Invest, played in the airline’s collapse. The auditor will look into Adria's financial information for any material misstatements of income, expenses, assets or transfers of property within the last few years. It is believed the German fund funnelled money from the airline and inked a number of highly damaging consultancy agreements on behalf of the Slovenian carrier with other companies in its ownership. Allegations of abuse of office and business fraud, including the theft of 5.000 US dollars from the company’s safe following its bankruptcy last September are also being investigated by police.

The Slovenian branch of the multinational PricewaterhouseCoopers (PwC) was scrutinised by the Slovenian Agency for Public Oversight last year under the suspicion it failed to report that Adria's 2018 financial statements did not accurately reflect its actual financial state. One of the main points of concern at the time was Adria's absorption of the STBE company, which was closely linked to 4K Invest, through a merger and acquisition. The move increased the airline's share capital and changed its ownership structure. STBE previously purchased the Slovenian carrier's brand name back in 2016 for just over eight million euros. Adria posted a net loss of 18.6 million euros for 2018, its last full year of operations.

Since Adria’s collapse, the majority of businesses owned by 4K Invest went into bankruptcy. The firm's managing director, Martin Vorderwulbecke, registered a new company under the name HDS 35 in late December of 2019. Mr Vorderwulbecke was the responsible manager who headed negotiations with the Slovenian government over the acquisition of Adria Airways. He is linked to nineteen other companies, most of which have been liquidated. It includes AA International Aviation Holding, which 4K Invest created to formally acquire Adria Airways.

Comments

  1. Anonymous09:05

    They will find many surpriseses.

    ReplyDelete
  2. Anonymous09:06

    Good. Hopefully they'll identify all the murky things that have been sone and someone is finally held responsible.

    ReplyDelete
    Replies
    1. Anonymous09:25

      *done not sone. Typo.

      Delete
  3. Anonymous09:07

    If Adria had not gone bankrupt in September it certainly would have now

    ReplyDelete
    Replies
    1. Anonymous09:10

      The management were visionaries...

      Delete
    2. Anonymous09:11

      Not necessarily. Had Adria survived until corona, the government would now certainly give them bail out money.

      Delete
    3. Anonymous09:13

      They would need so much money that it would be unsustainable even for the government to provide them with that amount.

      Delete
    4. Anonymous11:35

      actually, it is opposite, if JP managed to survive until covid19 crisis, they would survive as a airline, and they would have some future...most probably goverment would renationalized the company and that would be best outcome for JP employees

      Delete
    5. Anonymous12:03

      Agree with last anon. It would have been their blessing in disguise.

      Delete
    6. Anonymous14:28

      Personally I am happy they are gone, it was a torture to see them struggle with no end in sight.

      Delete
    7. Anonymous17:53

      If they only managed to stay afloat a few more months it could have been a different story.

      Delete
    8. Anonymous22:41

      Then the government would have to cover existing debt (figures close to 100m EUR) and any current and future losses due to coronavirus.

      And then invest some capital into airline, as administrators found the airline had virtually zero capital at time of bankruptcy.

      Delete
  4. Anonymous09:12

    Can't wait to finally see someone jailed for what happened at Adria

    ReplyDelete
    Replies
    1. Anonymous09:14

      I wouldn't hold my breath. None of the fat cats will be processed.

      Delete
    2. Anonymous09:25

      Exactly. None of the 4K fraudsters will come to Slovenia to face the music.

      Delete
    3. Anonymous10:12

      Jailed? Slovenia and their court system?

      Good luck.

      Delete
    4. Anonymous17:59

      With airlines this is not so hard because for every pillar of the organization like financial, legal or operations there is an accountable manager.
      Accountability means that he is ultimately responsible if there was some shady stuff being done. So, it does not matter that 4K did go bust, as it is linked to a person not a company.

      Delete
  5. Anonymous09:15

    It's been seven months since Adria went under and they are just doing this now??

    ReplyDelete
    Replies
    1. Anonymous09:19

      Better late than never.

      Delete
    2. Anonymous11:54

      What is the point of doing it now? Just to feed PWC now my guess as their services are not cheap. JP is gone, big fish will never be prosecuted so why spending more? Nonsense!

      Delete
  6. Anonymous09:16

    Miss Adria :(

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    Replies
    1. Anonymous09:18

      They are needed now more than ever. The government is chartering airlines with mostly small planes to bring people home or they are being put on Croatia Airlines to Zagreb. None of this comes cheap.

      Delete
    2. Anonymous10:13

      Remember that 50m Adria bailout? Cheap. Moreover, absolutely free.

      Delete
  7. Anonymous09:18

    About time

    ReplyDelete
  8. Anonymous09:20

    Big time fraud. Hopefully E&Y won't be a collaborator like PWC was.

    ReplyDelete
    Replies
    1. Anonymous10:09

      So much for these auditing companies being transparent. They play with the books just as the company that pays them asks for it.

      Delete
  9. Anonymous09:21

    I'm just happy there is something non corona related happening

    ReplyDelete
  10. Anonymous09:22

    Is it so difficult to prove 4K's responsibility in Adria's collapse?

    ReplyDelete
    Replies
    1. Anonymous10:07

      You have to have proof to process anyone. This audit should provide it.

      Delete
  11. Anonymous09:26

    But is it all just 4k''s fault?

    ReplyDelete
    Replies
    1. Anonymous10:04

      There is political responsibility too.

      Delete
    2. Anonymous10:06

      Exactly. Who chose 4K Invest and what due diligence was done.

      Delete
  12. Anonymous10:12

    And what was STBE's primary business? What is it that they do/ did?

    ReplyDelete
    Replies
    1. Anonymous10:17

      They are holding company and a company that manages intellectual property.

      Delete
    2. Anonymous10:19

      This is the owner of STBE
      https://offshoreleaks.icij.org/nodes/56038438

      Delete
  13. Anonymous11:07

    Wonder if anyone is going to buy the Adria uniforms :D

    ReplyDelete
    Replies
    1. Anonymous11:11

      ?

      Delete
    2. Anonymous11:15

      https://www.exyuaviation.com/2020/03/adria-airways-uniforms-put-up-for-sale.html

      Delete
  14. Anonymous11:17

    Everybody knew at the beginning the business model of Vorderwülbecke when they signed the deal.

    He "buys" distressed companies at a rate of a few per month, sends unexperienced und highly motivated people there to run it without any budget, and sells them if there is some positive trend, or liquidates it, if there is no fast profit to be made; and with "buying", he never paid more than he could get back within the first 6 to 18 months in the deals he made in the last 10 years

    there is no reason to assume that he lost some money here; sometimes there have been some irregularieties and some times some very stupid decisions; but there is no indication that there was any conviction for criminal actions...

    ReplyDelete
    Replies
    1. Anonymous11:20

      Interesting viewpoint. But can the same be said about Darwin Airline?

      Delete

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