Adria audit to determine collapse accountability


Ernst & Young have been awarded a contract by Adria Airways’ bankruptcy administrator to audit the former flag carrier in order to determine the responsibility its past owner, 4K Invest, played in the airline’s collapse. The auditor will look into Adria's financial information for any material misstatements of income, expenses, assets or transfers of property within the last few years. It is believed the German fund funnelled money from the airline and inked a number of highly damaging consultancy agreements on behalf of the Slovenian carrier with other companies in its ownership. Allegations of abuse of office and business fraud, including the theft of 5.000 US dollars from the company’s safe following its bankruptcy last September are also being investigated by police.

The Slovenian branch of the multinational PricewaterhouseCoopers (PwC) was scrutinised by the Slovenian Agency for Public Oversight last year under the suspicion it failed to report that Adria's 2018 financial statements did not accurately reflect its actual financial state. One of the main points of concern at the time was Adria's absorption of the STBE company, which was closely linked to 4K Invest, through a merger and acquisition. The move increased the airline's share capital and changed its ownership structure. STBE previously purchased the Slovenian carrier's brand name back in 2016 for just over eight million euros. Adria posted a net loss of 18.6 million euros for 2018, its last full year of operations.

Since Adria’s collapse, the majority of businesses owned by 4K Invest went into bankruptcy. The firm's managing director, Martin Vorderwulbecke, registered a new company under the name HDS 35 in late December of 2019. Mr Vorderwulbecke was the responsible manager who headed negotiations with the Slovenian government over the acquisition of Adria Airways. He is linked to nineteen other companies, most of which have been liquidated. It includes AA International Aviation Holding, which 4K Invest created to formally acquire Adria Airways.

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