November 27, 2019 / 3:46 PM / 16 days ago

Austrian court rejects FACC lawsuit against ex-CEO in cyber fraud case

VIENNA (Reuters) - An Austrian court on Wednesday threw out a lawsuit brought by Chinese-owned plane parts maker FACC against its former chief executive over whether he should have done more to stop a cyber fraud that cost it tens of millions of euros.

The company was tricked into transferring 54 million euros ($59.5 million) to foreign accounts in a so-called fake president fraud, according to a summary of the lawsuit issued last year by the court in Ried im Innkreis, where FACC is based.

Fake president frauds typically entail employees being asked to transfer company funds into alternative accounts by individuals posing as senior managers.

The firm made the fraud public in January 2016 and fired its finance chief Minfen Gu the following month. It dismissed Chief Executive Walter Stephan in May of that year.

It later sued the former executives for a collective 10 million euros. They denied wrongdoing. An FACC spokesman said on Wednesday that the damages sought had since increased to 43 million euros.

The case against Minfen was dismissed earlier, and on Wednesday the court threw out the lawsuit against Stephan, a spokeswoman for the court said.

“The claim was rejected in full on the basis that there was no failure of Dr Stephan to fulfil his supervisory duties,” the spokeswoman said.

FACC had alleged Minfen and Walter failed to set up adequate internal controls and to meet their obligations of collegial cooperation and supervision, according to the court’s earlier summary of the case.

“We are waiting for the written ruling and will then consider taking further legal steps. But that can take weeks,”

the FACC spokesman said.

Reporting by Francois Murphy; Additional reporting by Alexandra Schwarz-Goerlich; Editing by Jan Harvey and Lisa Shumaker

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