IMTECH€¦ · • Imtech Poland provided security for the loan to AWW in favour of the Austrian...

IMTECH

APG FINANCE AND RISK CONFERENTIE

FINANCIAL ANALYSIS

Increase in revenues = 323M

(14%)

Of which 83M Germany and Eastern Europe

BALANCE SHEET

Due from customers grows by 241M in H1

Trade Receivables grow by 15M

38%

Non-current assets grow 7% (101M)

German assets grow by 107M in H1

and 406M ltm

Only a bit is due to acquisitions

ABN AMRO Report – Imtech: working through its capital

And what’s happening with the cash?!

THE FRAUD WITH ADVENTURE WORLD WARSAW

On 28 December 2011, when AWW was unable to

make two advance payments of EUR 21 million

and EUR 37.3 million the following was done:

• The Austrian bank lended the money to AWW

• Imtech Poland provided security for the loan to AWW in favour of the Austrian

bank by creating a pledge over the amount credited to its account with the

Austrian bank, which therefore was not available to Imtech.

In June 2012 the amounts due from AWW had substantially increased. Apart from

the “trick” above, AWW and Imtech did the following:

• AWW wrote a promissory note (“wechsel”) of 147 million, which Imtech

booked as “cash”.

• KPMG argued that it should have been booked as other financial assets, but

this was waived away by management and the supervisory board

• AWW still did not have any financing in place.

THE X-GROUP

• In its reports on the fraud, Imtech referred to a mysterious group of people

called “the X group”.

• It has later become clear that this referred to a network of people among which

the grandson of the founder of Imtech Germany.

• Imtech Germany made payments to the X group of nearly 30 million Euro for

which no legitimate business purpose could be established.

• Moreover, Imtech Germany provided guarantees for liabilities of members of

the X group for which no business purpose could be established. The

transactions were instigated by Klaus Betz.

• Imtech Germany was able to hide these payments, because it kept

bookkeeping systems that were out of sight for Imtech Head Offices.

“Kaiser Klaus”

CONCLUSIONS FORENSIC INVESTIGATION

Corporate culture

We believe that the fraudulent actions referred to in paragraph 2.2 might have been mitigated if Imtech's corporate culture had been more open and sceptical. It has become clear to us that over the past years the "tone from the top" from the Former Board of Management has been to focus on "good news". By way of an example, there is evidence that the Former Board of Management was not receptive to downward adjustments of forecasts compared to budgets as proposed by operational management, and that with the involvement of the Former Board of Management the management of Imtech Netherlands under pressure upwardly adjusted Imtech Netherlands' forecasts and interim results for 2012 to a level which the management of Imtech Netherlands considered overly optimistic. Risk management often seems to have been considered as being primarily driven by external compliance requirements and not as a source of competitive advantage. Internal control overrides, including by the Former Board of Management, or its members, were not uncommon. The Former Board of Management approved intra-group invoicing for reasons which we believe to be inadequate. The resulting culture was enforced by Imtech's focus on revenue and EBITA growth and the direction of its management remuneration policies towards those goals of accounting triggers rather than cash triggers.

INSUFFICIENT BUSINESS CONTROLS