The Klagenfurt Public Prosecutor's Office has launched an investigation against Carinthian investor Franz Peter Orasch and four other individuals. They are suspected of breach of trust in connection with the operation of Klagenfurt Airport.
These comprehensive investigations were triggered by a detailed report by the Carinthian State Audit Office, which allegedly identified possible hidden profit distributions and excessive payments to companies affiliated with the Lilihill Group. Franz Peter Orasch was the majority owner of Klagenfurt Airport Operating Company from 2018 to 2023 and also temporarily served as Managing Director during this period. The allegations are serious and shed light on the complex relationships between private investors and public infrastructure. All persons affected are presumed innocent until a final verdict.
Klagenfurt Airport: A regional gateway under private management and public debates
Klagenfurt Airport, officially known as Klagenfurt Airport (KLU), is of strategic importance for the federal state of Carinthia and the entire Alpe-Adriatic region. It serves as a key gateway for tourism, business, and regional connectivity. However, for many years, the airport struggled with economic challenges, including frequently loss-making balance sheets and comparatively low flight volumes. Historically, the ownership structure was characterized by a strong public sector, with the state of Carinthia as a major shareholder through the Kärntner Beteiligungsgesellschaft (KFBG).
In 2018, a widely controversial privatization took place, in which the Lilihill Group, led by Franz Peter Orasch, acquired a majority stake in the airport operating company. The decision to privatize was based on the hope that a private investor, through entrepreneurial skills and new concepts, could help the airport achieve more flight connections, higher passenger numbers, and a stable economic future. In particular, Orasch expressed ambitions to develop the airport into a kind of "airport city," encompassing service and commercial space beyond pure flight operations. However, the transfer of the majority stake to a private investor was from the outset the subject of intense political and public debate about the value of public infrastructure and the risks of privatization. The state of Carinthia remained a minority owner, creating a complex jumble of responsibilities.
The role of Franz Peter Orasch and the Lilihill Group
Franz Peter Orasch is a well-known investor and entrepreneur in Carinthia and beyond. With his Lilihill Group, he is active in various economic sectors, primarily real estate development, but also in the technology and aviation industries. Orasch's involvement in Klagenfurt Airport was part of a broader strategy aimed at developing and increasing the value of regional infrastructure.
As majority owner and temporary managing director of the airport operating company from 2018 to 2023, Orasch exerted significant influence on the airport's strategic direction and operational decisions. During this time, various measures were taken to revitalize the airport, including attempts to attract new airlines and develop the site for additional commercial uses. The allegations of breach of trust now underway relate to precisely this period, during which Orasch and those associated with him steered the airport's fortunes.
The allegations of breach of trust: core of the investigation
The investigations against Franz Peter Orasch and four other individuals revolve around suspicion of breach of trust, a serious offense under Austrian criminal law. Breach of trust is regulated in Section 153 of the Criminal Code (StGB) and occurs when someone knowingly abuses their authority to dispose of another's assets or to bind another, thereby causing harm to the other's assets. The offense therefore requires an abuse of authority and a loss of assets, and the perpetrator must act intentionally.
The specific allegations against Orasch and the co-accused, as indicated in the report of the State Audit Office, can be divided into two main points:
- Hidden profit distributions: These are payments or benefits from a company to its shareholders that are not legally or tax-wise declared as open profit distributions. Such hidden distributions can be used to divert profits from the company without fulfilling the usual tax or corporate law obligations or, for example, to disadvantage minority shareholders who do not participate in the hidden distributions. In the case of Klagenfurt Airport, this could mean that funds flowed out of the airport operating company that could be attributed to the majority shareholders as profits, without this being done transparently and formally correctly.
- Excessive payments to companies close to Lilihill: This allegation states that the airport operating company may have procured services or contracts from companies closely associated with the Lilihill Group or Orasch personally, and paid prices for them that were above market levels. Such "excessive payments" would represent a financial disadvantage for the airport company, as it paid more for goods or services than was actually necessary. This could, for example, concern construction work, consulting services, or other contractual agreements. The public prosecutor's office will now investigate whether such payments actually occurred, whether they were excessive, and whether they led to a financial disadvantage for Klagenfurt Airport, as well as whether this was done knowingly and to the detriment of the company.
The State Audit Office: Trigger for the investigations and its criticism
The report by the Carinthian State Audit Office was the direct trigger for the criminal investigations that have now been initiated. The State Audit Office is an independent supervisory body that audits the financial management of public entities, such as state-owned companies or companies with state participation. Its task is to monitor the efficiency, economy, and appropriateness of the use of funds and to uncover any malpractice or illegality.
In its report on Klagenfurt Airport, the State Audit Office sharply criticized the airport's management under the majority ownership of the Lilihill Group. Two key points of criticism stand out:
- Missing documents: The Court of Auditors criticized the lack of important documents and records that would have been essential for a transparent and comprehensive audit of business processes and payments. Inadequate documentation makes it difficult to trace transactions and can fuel suspicions of opaque practices. For the investigating authorities, this is a serious indication that can complicate the investigation.
- Demand for an examination of possible liability claims against former bodies: The Court of Auditors explicitly requested an investigation into whether liability claims exist against former "bodies" of the airport operating company. In the legal context of a corporation such as the airport operating company, the term "bodies" refers to individuals in managerial positions, such as managing directors, board members, or supervisory board members. These individuals have a duty of loyalty to the company and are obligated to protect its interests. Should they breach their duties and thereby cause damage to the company, they could be held personally liable. The Court of Auditors' request indicates that, in its view, there may have been actions or omissions that resulted in financial loss for the airport.
The findings of the State Audit Office form the basis for the investigations now underway by the Public Prosecutor's Office, which will examine the allegations using criminal law.
Political reactions and the public debate
The initiation of criminal investigations into Klagenfurt Airport has triggered significant political reactions in Carinthia and beyond. Representatives of the state government and opposition parties have commented on the allegations, with differing opinions regarding responsibility and the future strategy for the airport. The privatization of the airport was already a highly emotive issue years ago, igniting heated debate and triggering a broad public debate. Even then, critics had raised concerns about the transparency of the sale process and the long-term impact on the regional infrastructure.
The investigations that have now come to light are fueling this debate again and raising questions about whether the expectations surrounding the privatization were met and whether the public funds that flowed into the airport were used properly. The airport's reputation and trust in its management could suffer as a result of the pending allegations. The political demand for full clarification and ensuring that the investigations are conducted transparently and in accordance with the rule of law are therefore of great importance.
The principle of the presumption of innocence: A cornerstone of the rule of law
It is of utmost importance to emphasize that the principle of the presumption of innocence, enshrined in the rule of law, applies to all persons involved in the investigation, including Franz Peter Orasch. This principle states that every person is presumed innocent until proven guilty by a legally binding court judgment. The initiation of an investigation by the public prosecutor's office merely represents the beginning of proceedings to clarify a matter; it is by no means synonymous with a conviction or an admission of guilt.
The purpose of the investigation is to gather evidence and clarify the facts of the case to determine whether criminal conduct has occurred. In the event of trial, it is the responsibility of the public prosecutor to prove the guilt of the accused beyond a reasonable doubt. Until then, all persons involved must be presumed innocent, and their rights, in particular the right to a fair trial and to a defense, must be fully respected.
Outlook on further investigations
The upcoming investigation by the Klagenfurt Public Prosecutor's Office is expected to be comprehensive and complex. White-collar criminal proceedings, especially those involving allegations such as breach of trust and hidden profit distributions, require a meticulous analysis of company balance sheets, contracts, cash flows, and internal documents. Investigators are expected to secure extensive documentation, interview witnesses, and consult experts to thoroughly examine the allegations made by the State Audit Office.
The duration of such proceedings is often unpredictable, as it depends on the complexity of the case, the availability of evidence, and the cooperation of those involved. The public will be following developments in this case closely, as it could not only affect the future of Klagenfurt Airport but also raises fundamental questions about the governance of public investments and the responsibility of managers and owners. A full and transparent investigation is in the interest of all parties involved and the rule of law.
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