Cologne The investigators came in civilian clothes, but the operation was too big to go unnoticed. A dozen vehicles drove up to the Munich headquarters of the travel group FTI, and several dozen investigators moved into the headquarters. Numerous FTI employees were no longer allowed to use their computers or leave their offices.
The excitement in the company was great when the police and prosecutors combed through Europe’s third largest travel group in late 2018. It was about possible fraud related to the billing of advertising campaigns for Turkey. Several top managers were targeted, including current CEO Ralph Schiller.
Then calm returned to the company. When the preliminary investigation was concluded in 2020, only a few employees found out. But now the events of that time could catch up with the company, its CEO Schiller and the Supervisory Board.
Because since the Handelsblatt reported last week about negotiations between the rival DER Touristik and FTI about a merger, this has caused a stir in the tourism industry. And now the criminal proceedings at FTI, which have long since been settled, are coming back into focus.
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The criminal proceedings, which “Business Insider” first reported on at the weekend, ended for three managers from the FTI management team in spring 2020 with a criminal record for fraud. The Munich District Court imposed suspended prison sentences of between seven and eleven months on Schiller, his predecessor and company founder Dietmar Gunz and another top manager. In addition, sensitive fines were due, in the case of Schiller in a low six-digit amount.
Competitor DER Touristik is negotiating a takeover of the tour operator.
(Photo: dpa)
All three accepted the penalty order at the time. Spicy: Schiller was promoted to CEO less than a year after his conviction in April 2021. This now sparks a discussion about the compliance culture at FTI. The three managers accused at the time did not want to comment personally on current issues from the Handelsblatt, Schiller refers to the company.
When asked, an FTI spokeswoman said about the fraud procedure at the time: “This procedure was successfully completed in March 2020 without an admission of guilt. FTI’s governing bodies concluded at the time that a settlement was the best solution to secure the company’s future and focus on the challenges ahead.”
Nevertheless, the fact is that an accepted penalty order is equivalent to a final judgement. The main difference to a criminal judgment is that no public main hearing takes place.
In any case, the challenges were actually huge for FTI at the time, because the corona pandemic brought the company into an existential crisis. The federal government had to support FTI 2020 and 2021 with several stabilization measures in the second half of the year and helped the company with more than half a billion euros.
The federal government helped in the corona pandemic with half a billion euros
Companies that claim aid measures have to fulfill special obligations. Among other things, they must “offer the guarantee of a solid and prudent business policy”. It is not known whether FTI informed the federal government in this context that the then CEO Gunz or his successor Schiller had just received penal orders. According to FTI insider circles, the federal government was in the picture. The Federal Ministry of Finance did not want to comment on this when asked.
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In addition, the question of how Schiller’s further advancement in the company can be reconciled with the penalty order is in need of explanation. The company explains its own claims on its own website: “Responsible, ethically correct and lawful action is just as elementary for the FTI Group as our customer orientation, exclusive content and services,” it says.
At the end of 2020, the company founder and long-time CEO Gunz resigned as CEO and Schiller took over. An FTI spokeswoman states today that in December 2020 the company “initiated a far-reaching change in close consultation with its creditors. A thorough review of past activities has been carried out and all necessary actions have been taken to ensure full compliance at all levels of the organization.”
Majority shareholders and supervisory board support convicted boss
Schiller has “the full support of the supervisory board and the shareholders”. Schiller is said to have had the backing of the majority owner, the Egyptian billionaire family Sawiris. Also noteworthy is the backing of the supervisory board, which was constituted in spring 2021 and whose managers were informed of the penal orders, according to information from the Handelsblatt.
The FTI Supervisory Board is even made up of people who come from industries that are particularly sensitive to compliance issues. The head of the supervisory board is Wolfgang Altmüller, chairman of the board of the third largest cooperative bank in Germany, Meine Volksbank Raiffeisenbank from Rosenheim. In addition, Altmüller is also the managing director of the RT/Raiffeisen Touristik Group, which cooperates with FTI and is the largest German travel agency with over 3,500 independent partners.
Also on the supervisory board is the lawyer Florian Amereller, who also advises the Sawiris family. When asked by the Handelsblatt, both did not want to comment beyond the company’s statement. Whether and to what extent the penalty order against Schiller, which has now become known, will have an impact on the negotiations with DER Touristik or on any personal details in the FTI management and supervisory board after a possible merger, is not known in the meantime. DER Touristik announced that it would not comment on “speculation and market rumours”.
However, whether the merger will come about seems more than questionable, at least given the options recently discussed. Apparently, the federal government does not seem to want to support a debt cut planned by DER Touristik, a subsidiary of the Rewe retail group, for the FTI group, which has debts of one billion euros. So the ball should now be back with the Sawiris – and their willingness to shoot more money.
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