BERLIN — Kinowelt exec Michael Koelmel was charged with 15 counts of embezzlement Monday in connection with the 2001 insolvency of the distribution/production company he founded with brother Rainer.
Although the brothers managed to resurrect Kinowelt last year, prosecutors have been probing Michael Koelmel’s activities, nearly derailing the siblings’ $32 million takeover bid for the insolvent company last year.
The Munich District Attorney’s Office alleges Koelmel misappropriated E25 million ($32 million) and impeded the insolvency proceedings.
Koelmel denied wrongdoing and said he will be found innocent if the case goes to trial. “If the charges were true, Kinowelt’s creditors would never have accepted our bid to buy back the company.”
$19 million question
The main thrust of the prosecutors’ case against Koelmel revolves around $19 million they contend Koelmel illegally transferred from Kinowelt to the brothers’ sports rights business, Sportwelt, before Kinowelt’s bankruptcy.
According to one Kinowelt insider, business dealings before the bankruptcy are damning either way: “On the one hand, they had to pay their bills, but any payments made before the insolvency look suspicious to prosecutors.”
Kinowelt, which grew massively during the Neuer Markt’s heyday, began to collapse after a number of major film and sports rights investments failed to turn a profit.
The Koelmels moved Kinowelt’s headquarters from Munich to Leipzig last year after reacquiring the company’s core assets — which include theatrical and home entertainment distribution divisions as well as a production unit — with the help of local state-owned bank Sparkasse Leipzig.