BERLIN — Michael Koelmel, co-founder of German producer-distrib Kinowelt, is on trial for breach of trust, fraud and obstructing insolvency proceedings in connection with the bankruptcy of Kinowelt in 2001.
The Munich District Attorney’s Office alleges Koelmel misappropriated some E20 million ($24 million) at the cost of company creditors and shareholders.
Koelmel denies any wrongdoing, claiming he was simply paid money that was due him.
The presiding judge, Hans-Guenter Melchior, expressed disbelief at Koelmel’s explanation: “I simply cannot understand that,” he said.
Prosecutors allege Koelmel transferred millions of euros to his private bank account and to the Swiss bank account of his wife and also moved large sums of money from Kinowelt to his own sport licensing company Sportwelt, whose mismanagement ultimately obstructed the company’s insolvency proceedings, according to prosecutors.
Koelmel said Kinowelt had planned to take over Sportwelt in order to augment its film licensing business with sports rights. Although the purchase was never finalized, prosecutors said Koelmel illegally obtained $18 million from Kinowelt for the planned purchase.
Kinowelt was founded by Koelmel and his brother Rainer in 1984 and floated on the Neuer Markt in 1998. The cash infusion lead to a quick expansion and fatal excess — high-priced shopping sprees sank the company three years later.
Yet the Koelmels managed to buy back the bankrupt company’s assets last year after a prolonged process that was continually hampered by Michael Koelmel’s legal problems.
Koelmel could face several years in prison if convicted.
(The Associated Press contributed to this report.)