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Corti rejects "unfounded" Swissair charges

Mario Corti is only the second defendant to give testimony Keystone

Former Swissair head Mario Corti has rejected in court charges of unlawful management in relation to the financial collapse of the airline.

This content was published on January 22, 2007 - 21:54

Unlike most of the other defendants who have so far refused to testify in Switzerland's biggest corporate trial, Corti answered most questions on Monday, defending himself vigorously and criticising the prosecution's arguments.

Corti, 61, is one of 19 former top executives, board members and consultants facing charges that include damaging creditors, mismanagement, making false statements about the business and forging documents.

Corti, who was chief executive of the SAirGroup, Swissair's parent group, during its last months of existence in 2001, said that the charges against him were weak and based on errors in reasoning.

"The prosecutors based their [arguments] on the reports of an expert who doesn't know a thing," he commented during the second week of the trial in Zurich.

"After four years, I finally have the opportunity to speak in public," he told reporters outside the courtroom. He said he was innocent. "I've never had anything to hide."

Denial

Corti defended the restructuring of SAirLines and denied having acted to the detriment of the company's creditors.

Amid ongoing civil procedures, he declined to comment on Swissair having made a €150 million (SFr243 million) payment to Belgium's Sabena airlines in 2001, which came as part of the group's strategy of buying minority shares in a number of smaller airlines and is thought to have contributed to Swissair's insolvency.

Corti, who was the former head of finance at Nestlé, acknowledged that he received a SFr12 million (then $7.5 million) salary in advance when he took over as SAirGroup chief in March 2001, soon after the airline had posted a SFr2.9 billion loss and had debts of SFr15 billion.

He said in 2000, when he was an executive, the SAirGroup was composed of two healthy parts, Swissair-Crossair and related air companies, and a weaker component, the foreign firms it had invested in. The executive board only realised towards the end of autumn 2000 the difficulties it was facing, he added.

Corti said he knew that he faced a difficult task when he took over as head, but "nobody could know...what would happen later," he told judge Andreas Fischer, who is presiding over the three-judge panel. Some 400 spectators watched the trial on Monday.

Corti, who has retired to Boston in the United States, said he was "very disappointed with certain developments" during his tenure, but he didn't elaborate.

Schorderet

Georges Schorderet, chief financial officer of the SAirGroup from September 1995 to May 2001, also appeared in court on Monday. Schorderet refused to answer any questions but said he was innocent and said the prosecution's accusations were absurd and unfounded.

He claimed his team tried everything to prevent the airline from bankruptcy.

"I very much regret that we didn't succeed," he told the judge.

All nine defendants who have so far appeared have proclaimed their innocence. Apart from Corti and Thomas Schmidheiny, all the others refused to answer the prosecution's questions on grounds that it could prejudice parallel civil proceedings brought by former employees and shareholders seeking hundreds of millions of francs in compensation.

swissinfo with agencies

Key facts

The trial opened on January 16 and should run until March 9 at Bülach district court near Zurich.
There are 19 defendants, including 16 former members of the Swissair board and the company's top management.
The investigation took five years and produced 280 metres worth of documents.
The prosecution's indictment runs to 100 pages.

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In brief

Swissair planes were grounded in October 2001, after the company had been in business for 71 years.

The downturn in the aviation market after the terrorist attacks of September 11, 2001, proved the last straw for the heavily indebted Swissair, which folded the following year.

The airline collapsed after buying stakes in numerous loss-making airlines, including Belgium's Sabena and Poland's Lot, in an attempt to form its own airline alliance.

Swissair left behind debts to the tune of SFr17 billion ($13.7 billion) and resulted in 5,000 job losses.

The remains of Swissair and the regional carrier Crossair were brought together in 2002 to form the new national carrier Swiss, which was in turn taken over by Germany's Lufthansa in 2005.

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