Economy & Politics

Yesterdays Western How a Swabian looted Eastern businesses after the turnaround

Wolfgang G. promised a lot – and did not deliverIllustration: Jindrich Novotny

It wasn’t long before the fairy tale about the thirsty Swabian medium-sized company that saved East German businesses. But it sounded so nice: “I want the companies over there to be successful,” explained Wolfgang G. pleasantly when he bought one ex-GDR company after the other after the turnaround. A man from the Treuhand, the giant authority responsible for privatizing the Eastern companies, remembered “normal sales talks with a solid Swabian”.

If those responsible had wanted, they could have known early on that the Swabian was not as solid as it seemed. Wolfgang G. ran the traditional Göppingen-based company Bellino, a longstanding Daimler supplier. But Bellino’s business was no longer going well, and house banks raised the alarm. Nevertheless, G. got more than 20 production sites in the former GDR. The trustee awarded him the contract when he had long since stopped paying the agreed purchase prices. “They wanted to get rid of the stuff,” G. later explained to a Bundestag investigation committee.

The fact that the Swabian tricked came out only thanks to persistently investigating works councils from the Eastern companies. In April 1993, G. pompously laid the foundation stone near Halle. Among those invited: Federal Environment Minister Klaus Töpfer. An employee demonstration blew up the party: “We need an investor, not an exporter, to pull money out.”

Crooked business of the Halle Treuhand branch

G. had systematically plundered his Eastern acquisitions, partly transferred the money to private accounts and partly used to plug holes in the parent company. He later justified that he had just operated “cash management”. In summer, the judiciary had him arrested in his Göppingen villa because of the risk of escape. Many of the companies were on the brink of extinction, and the once solid Bellino company went bankrupt.

The case was just one of several crooked shops at the Halle Treuhand branch. Several managers were later arrested there, one was convicted of bribery in connection with G. – the medium-sized company had paid him more than DM 5 million. G. himself was sentenced in 1994 to five years and three months in prison for bribery and fraud. The Bundestag committee, however, was able to shed little light on the criminal behavior of the Halle trust.

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Wolfgang G. may no longer be given his full name because he has served his sentence and no longer appears in public. The Göppingen company heritage was long regarded as a proper medium-sized company in its homeland. It was only when he expanded east that his neck broke.

More from our series “Western from yesterday” you’ll find here


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