Ebner accused of insider trading

Trouble just keeps on coming for Martin Ebner Keystone Archive

The embattled Swiss financier, Martin Ebner, has been charged with insider trading.

The Zurich prosecutor’s office accuses the banker of receiving insider information about the sale of Pirelli shares in March 1998.

Officials are seeking a seven-month suspended sentence against Ebner.

An investigation was launched after a former employee of Ebner’s BZ group registered a complaint at the end of 2000.

Ebner is alleged to have received information in 1997 from the Italian tyre giant’s management about the company’s planned restructuring and share buyback scheme.

The plans included changes at Swiss-based Société Internationale Pirelli SA (SIP). The tyre and cable maker was preparing to merge SIP with its Italian parent company, based in Milan.

Zurich prosecutors claim that the BZ Group knew in advance about the pending restructuring of SIP by Pirelli.

They say that on March 10, 1998, Pirelli management allegedly told Ebner it was only willing to pay SFr350 ($238.40) for SIP shares, below the then-market price of SFr365.

The BZ Group’s listed investment fund, Stillhalter Vision, is then reported to have tried to sell its 6.2 per cent stake in SIP at a higher price. The alleged plan backfired when the share’s value dropped to SFr350.

Ebner stands accused of attempting to illegally enrich himself since he made no profits out of the deal.

Ebner bewildered

Ebner on Friday said the charges against him were unfounded. “I am bewildered and I don’t understand the indictment,” he said in a statement.

The insider trading charge is just the latest of a long list of woes to have hit the financier this year. Saddled with huge debt, his BZ Group has offloaded some of its activities in recent months.

Ebner made his reputation as a ruthless corporate raider, buying shares in high profile companies and then demanding management changes and better share performances. He was also often portrayed as a shareholders’ champion.

But the stock market collapse left him high and dry, and struggling to meet his financial commitments. The first sign of real trouble came when he sold his Vision listed investment funds to the Zurich Cantonal Bank in July.

Ebner also rid himself of his 19.8 per cent stake in Lonza and gave up his seat as chairman of the board of the Swiss life sciences group.

The financier has since quit the board of the troubled engineering giant, ABB, but has so far hung on to his ten per cent stake in the company.

swissinfo with agencies