Swissair Shareholders Vote for Probe
Apr. 25, 2001
ZURICH, Switzerland (AP) _ Management of the financially troubled Swissair group on Wednesday promised to cooperate with an extraordinary investigation into how the company came to lose 2.9 billion Swiss francs ($1.7 billion) last year.
Shareholders at the group's annual meeting voted almost two-to-one in favor of the investigation, which was proposed by Zurich canton (state) and the Swiss federal government, both of which hold important stakes in the company.
Chief executive Mario Corti told the more than 5,000 shareholders who turned up for the meeting that board members would also hold off asking shareholders for the usual discharge _ which would limit the period during which civil proceedings for negligence could be brought _ until the investigation is completed. They later agreed a discharge for him alone.
The investigation will look into how the company was run, and also whether management acted correctly in the financial information which it provided to investors.
A separate criminal investigation has also been launched by Zurich authorities.
Earlier in the meeting _ which took place in an airplane hangar and lasted eight hours _ shareholders voted overwhelmingly to approve the 2000 earnings statement, despite widespread grumbling about the losses. About 5,300 shareholders attended.
The first major signs of trouble came in January when Philippe Brugisser was dismissed as CEO. He had been the mastermind behind the group's ``hunter'' policy of acquiring stakes in small airlines in other countries. It was these investments that led to the majority of the losses.
Chairman and acting CEO Eric Honegger stood down last month along with most of the other company directors. Corti moved from food and drinks giant Nestle, where he was highly respected as chief financial officer, to take Honegger's place.
A company statement Wednesday said the group was dropping the SAirGroup name and immediately reverting to Swissair-Group _ the name it used before it began expanding abroad.
It also said it was in the process of an orderly withdrawal from investments in French airlines. The group has owned stakes in the French carriers Air Littoral, AOM and Air Liberte, which together accounted for losses of 600 million Swiss francs ($344 million).
Swissair also disclosed that it had a new billion-franc ($590 million) credit line from three large banks, Deutsche Bank, Citibank and Credit Suisse First Boston.
As part of the attempt to recover, the group announced on Monday that it had sold its Swissotel chain of 25 luxury hotels to Singapore's Raffles group and two other buyers for 520 million francs ($305 million).
Decisions are pending on the group's stakes in Belgian and German carriers.
Swissair shares fluctuated wildly on the Swiss stock exchange during the meeting, but ended the day at 113 francs ($66) per share, up 3.2 percent on the previous day's close. The group's shares have more than halved in value since January.