Legally troubled German film fund VIP Medienfonds has appointed Dirk Specht, a former finance and controlling exec at PriceWaterhouseCoopers and Arthur Andersen, to co-manage with acting CEO Andreas Grosch.
VIP ran into difficulties in October after police raided its offices and the home of former topper Andreas Schmid, who was arrested on suspicion of fraud and tax evasion. Schmid remains behind bars during the prosecutors’ probe.
Grosch, who ran the company with Schmid, will continue to oversee film production while Specht handles financing.
VIP, once one of Germany’s biggest film funders, co-produced Tom Tykwer’s upcoming “Perfume: The Story of a Murderer” as well as “Running Scared,” “Ask the Dust,” “The Upside of Anger” and “Lord of War.”
Schmid’s arrest, which shocked the local industry, coincided with the new German government’s decision to shutter tax shelter film funds faster than expected.
VIP and Schmid now face a flurry of lawsuits from irate investors who will not get the hefty tax writeoffs they had hoped.
Prosecutors allege VIP defrauded investors who put millions in VIP funds believing they would get a tax break on their investment.
VIP did not use their investments for film production, authorities charge, but placed the money with banks to secure attractive investment guarantees, which in turn drew large numbers of risk-averse investors.
If that’s the case, prosecutors argue, investors won’t be able to claim a tax deferral, since no entrepreneurial risk or intention to make a profit existed.