November 29, 2022

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Lars Windhorst’s bank reported to regulator by Hertha Berlin

3 min read

A Vienna-based private bank that provided confirmations of wire transfers supposedly made by German financier Lars Windhorst was reported to Austria’s financial regulator after the money failed to turn up on time.

In July 2020, Windhorst agreed to pay €150mn to raise his stake in football club Hertha Berlin from 49.9 per cent to 66.6 per cent.

A senior banker at European American Investment Bank repeatedly told the Bundesliga club in October and November 2020 that an expected payment of €25mn from Windhorst’s personal account was imminent, people familiar with the matter told the FT. However, despite the bank’s repeated assurances, only €5mn was paid at the end of October; the remaining €20mn was transferred in mid-December.

In late October 2020, the Euram banker informed the club that the payment “has now been entered into our systems after a delay” and would “certainly” arrive in Hertha’s account in the following week, according to people familiar with the matter. When this did not happen, the banker informed the club in early November that the payment had now been “irrevocably accepted” by the bank. One week later, the banker then blamed IT issues at its correspondent bank but stressed that he was able to “execute the transfer immediately” and offered to send a “money confirmation via screenshot”.

Hertha was so incensed at the communications around the delays that it raised a complaint with Euram’s top management and reported the conduct to Austria’s FMA financial regulator. The club argued that the behaviour raised “serious questions” about “proper business conduct”.

The flamboyant 45-year-old Windhorst made his name in the mid-1990s as a teenage entrepreneur and was hailed as a wunderkind by then German chancellor Helmut Kohl. By the time he was 34, he had weathered the collapse of two companies, personal bankruptcy and a suspended jail sentence for “breach of trust”. In 2017, Deloitte resigned as the auditor of Windhorst’s now-defunct investment vehicle Sapinda Invest after saying it received letters that contained “deliberately false” information about a fund’s financial position from a custodian bank. The custodian back then denied the allegations.

Windhorst, who also owns a German shipyard, an Italian lingerie brand and a shopping centre in Hannover, paid €374mn for a majority stake in Hertha between 2019 and 2021. After falling out with the football club, he now wants to sell.

A lawyer for Euram told the Financial Times that Hertha’s complaint to the banking regulator was “completely without merit” and said that the club “even apologised to our client Euram Bank” in writing for the “potential irritation”. In the letter, seen by the FT, Hertha in January 2021 told Euram it regretted any “potential irritation”.

Windhorst last month announced that he wants to terminate his involvement with Hertha, following revelations that he allegedly hired corporate spies who set up an undercover operation to force out the club’s president.

Founded in 1999, Euram Bank says it offers private and investment banking services for Austrian and international individuals, companies and institutional investors.

Hertha and the FMA declined to comment. Windhorst declined to comment.

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