Austria’s Hypo Alpe-Adria has replaced its
entire leasing management in Slovenia amid mounting speculation of
financial irregularities within the structure.

The sudden replacement last week has been
followed by confirmation by local police authorities of an ongoing
investigation in the lender’s Slovenian banking and leasing
units.

Slovenian police spokesman Drago Menegalija
said that currently no procedures are being carried out in
connection with the change of management. He said: “However, the
police are conducting several pre-trial investigations in different
cases, looking into suspected criminal offences, which also refer
to transactions with the mentioned legal entities.”

Investigations into potential criminal
offences at Hypo’s Slovenian arms started in mid-2010, in
connection with real estate trade, financial transactions in
Slovenia and abroad, and suspicions of abuse by persons in charge
who took part in these transactions.

The Slovenian police are still collecting the
necessary documentation and are working with law enforcement
authorities in other countries. “As regards the operations of these
legal entities, we requested the Austrian law enforcement
authorities last year for information and this year we received
their reply,” the police spokesman said.

The financial irregularities are also linked
to various institutions and businesses in Lichtenstein.

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The Austrian bank refused to comment on the
financial irregularities. A bank spokesmen said: “The board decided
that our new strategy for the new Hypo Alpe-Adria should be
implemented by a new executive board. For the leasing business, it
is our plan to integrate this separate business unit into the bank
structures to make structures easier, more effective and more
profitable.”

The new head of leasing is Danijel Nowak.
Before his appointment at Hypo Alpe-Adria he was head of Sparkasse
Leasing Slovenia, and has worked in leasing both in Slovenia and
Croatia.

Last year, Hypo Alpe-Adria’s former chief
executive Wolfgang Kulterer was arrested. He is charged with misuse
of funds and false testimony.

The Austrian state nationalised the troubled lender at the end of
2009.
Most of Hypo’s difficulties stemmed from rising loss
provisions in the Balkan region, where it had greatly expanded its
leasing business in the last seven years.