At the general meeting the shareholders did not receive an explanation for what had happened with the capital in the amount of CHF 12 million paid-in by the shareholders in the past, despite the request of lawyer Ms. Breu from CLLB, attorneys at law.
It is apparent from the ES AG annual reports that only a very small fraction of the capital paid-in by the shareholders had been used for the actual operating business, the purchase and collection of receivables (only about CHF 500,000 in fiscal year 2008/2009). The majority of the money (in excess of CHF 6 million for the fiscal year 2008/2009 alone) trickled away in consultant fees, expenses for branch offices, salaries etc. In contrast to its horrendous expenses (more than CHF 6 million in fiscal year 2008/2009 alone) ES AG only had minimal revenues from operations (app. CHF 200,000 in fiscal year 2008/2009). Because ES AG shows the proceeds from the sale of shares (astonishingly enough) as revenues in its annual reports, this likely stayed concealed from most shareholders.
It was likely also not apparent to most shareholders when buying the shares, that with the sale of shares (par value CHF 0.01) at a price of up to € 5.20 per share, not only did ES AG profit, but also the founding shareholders when receiving direct compensation. The principal shareholder alone for example, Intrum SA, domiciled in The Bahamas, received approximately CHF 667,000 from the sale of shares.
Revealingly, the new president of the board of directors, Locher, does not hold the old management responsible for the bad financial situation of the company, but instead blames the ‘smear campaign’ on the internet forum WallstreetOnline as well as the general financial crisis.
Furthermore it was revealed to the shareholders at the general meeting, that the intended initial public offering, which ES AG strongly advertised in the process of selling the shares, definitely is no longer being pursued, because ES AG is too small and does not have the “power” for an initial public offering.
In the opinion of law firm CLLB, which specializes in banking and finance and has offices in Munich, Berlin and Zurich, the case exhibits parallels to well-known investment fraud cases, which in recent times unfortunately have been increasing again and against which the German Federal Institute for Financial Services (BaFin) has already issued warning. The investment fraud cases followed the following scheme: A corporation was incorporated, mostly in Switzerland, because the shares only have to have a par value of CHF 0.01 and only 20% of the capital has to be paid-in. The corporation was given a good story to lead everybody to believe in a seemingly profitable business idea. A successfully operational business was falsely displayed by way of permanent press releases, internally produced by the company itself, about alleged success stories and any ‘soon to be’ events, which then unfortunately never materialized (e.g. a soon anticipated initial public offering or alleged institutional investors interested to acquire blocks of shares). The shares were recommended to unsuspecting investors by door-to-door salesmen or over the phone as an “insider’s tip” and sold at astronomic prices. The actual operations behind the company were in fact however only a miniscule business as an alibi. The capital paid-in by the shareholders was then transferred out with several detours. At the end the initiators had made a lot of money but the small investors had no chance of selling their shares to recoup their investment, because nobody was willing to purchase the worthless shares.
CLLB, attorneys at law, advises the affected shareholders to seek legal counsel from a law firm specialized in banking and finance regarding their claims against ES AG as well as the people behind it.
Die Kanzlei CLLB Rechtsanwälte wurde im Jahr 2004 in München gegründet. Neben den vier Partnern István Cocron, Steffen Liebl, Dr. Henning Leitz und Franz Braun sind mittlerweile auch Alexander Kainz, Thomas Sittner (LL.M.) und Hendrik Bombosch als Anwälte mit an Bord. Erklärter Schwerpunkt der wirtschaftsrechtlich ausgerichteten Kanzlei ist Kapitalmarktrecht. Daneben umfasst das Beratungsspektrum aber auch Gesellschafts- und Steuerrecht. Seit Oktober 2007 ist CLLB Rechtsanwälte mit eigenem Büro in Berlin vertreten.