One of Austria’s best known family business dynasties is suing the country’s government in an international arbitration court to try to end a protracted investigation into its banking business and its officials.
The Meinl family, which is linked to a famous food and coffee business in Austria, and owns Meinl Bank, has gone to the Washington-based International Centre for Settlement of Investment Disputes, part of the World Bank, to file its claim. Far East, a Malta-based group controlled by the Meinl family and owner of Meinl Bank, says Austria has breached international law and its treaty obligations by failing to provide fair treatment of its investment and has damaged its investment.
Kenneth Reisenfeld, a partner at law firm BakerHostetler, which brought the cast to ICSID on behalf of the family, said: “Meinl Bank and Julius Meinl V (chairman of the Meinl bank) have been subject to massive violations of due process and international law by the Austrian government. They are victims of a public smear campaign that has had the effect of running a historically successful bank into the ground.”
Julius Meinl was arrested in 2009 and later released on record bail of €100 million as part of investigations centred on a potentially wrongly inflated dividend payment for the financial year 2008.
The family business traces its history back to 1862 when Julius Meinl great-great-grandfather, Julius I, started selling roasted coffee beans in Vienna in 1862. In the years leading up to World War I, the business grew rapidly throughout the Austro-Hungarian empire. Julius II managed to keep the company going under the Nazis, although Julius III and his Jewish wife fled to Britain in 1939, along with their son Julius IV. The fifth Julius and the main person involved in the current lawsuit was born in the UK in 1959.
In the late 1990s, the family sold the Austrian stores, but kept one landmark food store in Vienna and the family’s property portfolio in central Europe. Educated in Vienna and St Gallen in Switzerland, Julius V went into investment banking in London and New York. He took over the family bank in 1983, and turned the savings bank into an investment bank and fund-management firm.