from eUSAToday

ZURICH, Switzerland - A Zurich district court has launched a criminal investigation of three former members of the executive board of the collapsed Swissair Group, officials said Tuesday.

The district court did not release the names of the Swissair executives under investigation, but District Attorney Hanspeter Hirt said investigators are pursuing suspicions of falsified documents, unfaithful management and publication of incorrect business results.

Police in major Swiss cities Tuesday seized documents related to the company dated between 1998 and 2001, officials said. The airline's administrator was not immediately available to comment.

The airline, out of business since last March, filed for bankruptcy protection in October last year after the flag carrier was left without cash, succumbing to a debt of $7.9 million.

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One could always hope that they will look back a little further starting at 1996. Let's just hope somebody cares enough to.

Here is the past story of the analyst that was fired for telling the truth about swissair. It appears that swissair went to great extremes to keep their reputation sterling despite what was really going on at the time. They even managed to convince the press following the crash of how great they were despite their responsibility in causing it. Pretty disgraceful.

Warnings about Swissair ignored, says former banker


Christoph Chandiramani gives his view of the Swissair collapse [Keystone]


Prompt action could have averted Swissair’s collapse, says a former Credit Suisse analyst, who claims he was sacked after warning of the airline’s financial problems.


More than a year before Swissair’s collapse, it was clear that the airline was in deep trouble, says Christoph Chandiramani. Yet his warnings that the airline was heading for financial disaster went unheeded, leading to the biggest corporate collapse in Swiss history.

In an exclusive interview with swissinfo, Chandiramani said he first warned of problems at the Swissair Group on July 6, 2000, shortly after the departure of Swissair head, Jeff Katz, and following negative news reports about the airline group on Swiss television.

He claims he was sacked by Credit Suisse four days later, simply because he had dared to publish negative comments about the Swissair Group.

The rest of this story:
http://www2.swissinfo.org/sen/Swissinfo.html?siteSect=161&sid=863258

From an old post on the sr111 board slightly updated:

There seems to be a lot of dishonesty and denial
surrounding the entire crash (and the company’s demise) on the part of this airline that
was responsible for 229 deaths. Just to list a few of
what could appear as that:

-A psychologist
participates in an article in which he states outrageous
claims about a person who lost her beloved husband in
the needless tragedy without ever having met her.
Suddenly he shows up in the Canadian press recently as the
psychologist who has helped the swissair pilot's wife (who
incidentally works for the airline now) just a day after the
tragedy. This family member just happened to be a very
outspoken person regarding the IFEN and other safety issues
that surrounded this horrible tragedy. The
psychologist just happened to be in Halifax directly following
the crash.

-Cockpit map lights suddenly
replace the IFEN as a focus of the investigation of sr111
in the press particularly the WSJ. In an article
written by the WSJ, they quote an ‘unknown source’ who
discovered this problem regarding these lights. Who was the
source of this information? Srtechnics who discovered
this problem in their other MD-11 aircraft, reported
this to the TSB. Srtechnics was a part of sairgroup
now called swissair group. The article basically said
the crash was caused by these lights thus shifting
the blame to boeing who is now the owner of McDonnell
Douglas (since 1997). To date, no family member that I
know of has been informed that the cockpit map lights
are being blamed for the crash. Furthermore, the TSB
claims they have yet to find a map light that would
indicate that this was the case yet they have located
burnt kapton and tefzel wiring.

-Many times on
the sr111 board, we have posted a letter from a
former (swissair) highly respected chief safety pilot
regarding the fact that swissair though suffering several
serious smoke in the cockpit situations….one almost fatal
in Munich in 1993, had elected not to install the
EVAS which allows pilots to be able to view their
instruments in a crisis situation due to cost. A press person
(some of us call it ‘spin’ ) from swissair announced
that this is not the case, that actually they decided
it didn’t work to their satisfaction. The chief
safety pilot had written this letter to the manufacturer
of this device long before swissair made their
statements (and prior to the tragedy of sr111), and
specifically stated that he personally was impressed with EVAS
and how well it worked in allowing pilots to see
during simulated dense smoke in the cockpit situations.
The airline spent far more on installing the IFEN
(which they hoped would generate tremendous revenue from
the gambling feature) than it would have cost them to
have EVAS available to their pilots.

-A Credit
Suisse analyst is fired for stating that swissair was in
deep trouble financially. Turns out that the group was
indeed having serious problems due to the CEO (and
board’s) plan of buying up other airlines that were
producing no profits. The CEO of Credit Suisse was on the
board of directors of swissair group (and has since
resigned). A member of this board said that recently that
analyst won a case in which he sued due to the fact that
his information was indeed correct.

And now we recently find out that indeed 3 former Swissair executives are being investigated for possibly falsifying financial records. This list is just the tip of the iceberg IMHO. The difference between Enron and the Swissair debacle is 229 dead human beings. We want some answers.

If you haven't followed the sr111 board from the beginning I think I should explain that the psychologist made very unprofessional and disparaging remarks regarding this outspoken family member without ever having met her in person. Furthermore it appears that the psychologist may have worked in some capacity for swissair as he was counseling the pilot's wife and was in Halifax directly following the crash.

Here is some information regarding the swissair criminal probe:

Swissair Executives Face Criminal Investigation

--------------------------------------------------------------------------------

Story Filed: Wednesday, June 19, 2002 11:38 AM EST

GENEVA, Jun 19, 2002 (Xinhua via COMTEX) -- A Zurich district court has launched a criminal probe against three former executive board members of the collapsed Swissair Group.

Local media reported that Swiss Judicial officials announced the investigation on Tuesday, but did not reveal the names of those under question.

However, according to the "Tages Anzeiger", Swissair's former chief finance officer, Georges Schorderet, and a former chief executive, Philippe Bruggisser, are two of the people under investigation.

Hanspeter Hirt, the district attorney, said the probe was based on suspicions of falsifying documents, unfaithful management and publication of incorrect business data.

The investigation follows news reports that police seized documents on Tuesday in Basel, Geneva, Waadt and Zurich as part of an inquiry into alleged breaches by senior Swissair managers between 1998 and 2001.

Swissair went out of business in March after filing for bankruptcy protection in October. The airline was grounded shortly after September 11 after running out of cash to purchase fuel and pay wages.

The icon Swiss company posted a net loss for the year 2000 of around 5 billion Swiss Francs (3.21 billion U.S. dollars). It ultimately collapsed under the weight of total debts worth 13 billion Swiss Francs (8.4 billion dollars).

According to the Zurich court, Swissair executives are alleged to have failed to react to a forecast in the summer of 2000 by Swiss bank Credit Suisse, which said the company might post a net loss of around 500 million Swiss Francs (321 million dollars).

Investigators claim that Swissair neither commented on the figure appropriately nor did it warn markets that the company might post a loss in 2000.

Hirt estimates his investigations into Swissair's collapse could take at least three years.

In addition to the other points I posted regarding swissair's dishonesty (IMO) I think the following is worth noting:

It was reported not long after the crash and the IFEN wiring was discovered to be burnt, that a person who worked for Switzerland's equivalent to the FAA (BAZL) publicly expressed his concern with the hurried and careless manner in which the IFEN was approved by his agency. He noted that the inspection conducted was hasty and careless as the wiring to the system was already covered up before they were able to take a look at it. He stated that they were pressured into approving it. He was ostracized for expressing his concerns, and reportedly told to keep quiet.

Swissair Probe Increases Criticism Of CS CEO Muehlemann

By MARTIN GELNAR

Of DOW JONES NEWSWIRES
ZURICH -- A police investigation involving the role of Credit Suisse Group's (Z.CSG) chief executive and chairman Lukas Muehlemann in the collapse of Swissair Group AG (Z.SAG) has increased questions about his leadership.

In a damage limitation exercise, Switzerland's second-biggest bank said Monday the probe - that saw Muehlmann voluntarily handing over documents to police at his home - won't hamper its business because Muehlemann isn't a primary target of the police action.

But some observers say the bank has lost much of its agility and clout under Muehlemann, a former McKinsey man.

"I just don't trust the bank and its strategy," said fund manager Dieter Winet of Swissca Portfolio Management.

He said he favors rival UBS AG (UBS) because it has a more risk-averse management.

Winet has put Credit Suisse on underperform after its first-quarter results.

Muehlemann wasn't involved in Swissair's day-to-day business but was a member of the company's supervisory board. A district court in the canton of Zurich recently started a criminal investigation into three former Swissair top executives - believed to be the former chief executives Philippe Bruggisser and Eric Honegger as well as former chief financial officer Georges Schorderet.

The aim of the investigation is to establish whether management breached laws between 1998 and 2001, the year the Swiss national carrier collapsed.

Police also removed documents from other former Swissair board members, sources said.

This latest move is seen putting more pressure on Muehlmann. At the Credit Suisse general meeting May 31, he won shareholders' support but minority shareholders requested he step down from one of the two top jobs.

"Pressure is clearly building on Muehlemann to step down from at least one of his posts," said a market source who requested anonymity.

One strategist said Muehlemann's clinging to power reminds him of former Zurich Financial Services AG (Z.ZFS) chief executive and chairman Rolf Hueppi. Hueppi resigned mid-May from both posts after calls demanding his resignation became too loud to ignore.

Credit Suisse's shares have plunged in recent weeks - exacerbated by the current sector downturn - in part due to concerns that management seems unable to tackle the bank's problems.

Not even recent speculation that banking giant Citigroup Inc. (C) may be considering a takeover bid for Credit Suisse has helped the Swiss bank's share price.

At 1310 GMT, Credit Suisse shares were down 6.5% at CHF43.95, off a 52-week low of CHF43.25 hit earlier in the session. The general market was down 2.3%.

Critics focus on issues such as Credit Suisse's Initial Public Offering practices in the U.S. - where the bank reached a settlement with the Securities and Exchange Commission.

More problem areas are the recent troubles at Credit Suisse's insurance unit Winterthur, which posted a first quarter loss and recorded a sharp drop in capital. Credit Suisse last week injected CHF1.7 billion to improve the insurer's capital base.

Then there is Muehlemann's spotty record as board member of companies such as Swissair and Argentine's Banco General de Negocios, a bank at the center of money laundering allegations. Muehlemann resigned from Swissair's board last year and left the Argentine bank's boardroom in April.

But there doesn't appear to be any management quick fix available because a move to promote John Mack, head of Credit Suisse's investment banking unit CSFB, or its private banking counterpart Thomas Wellauer, would pit one against the other, the source said.

The same would apply if recent rumors that Credit Suisse may offer fomer UBS AG (UBS) manager Luqman Arnold a top job prove to be true.

Discontent within the bank's staff is believed to be growing after the bank two weeks ago announced 500 job cuts in its domestic retail and private-banking business, bringing the total number of jobs it expects to shed up to 4,100.

-By Martin Gelnar, Dow Jones Newswires; +41-1-212-2181; martin.gelnar@dowjones.com

Updated June 24, 2002 9:42 a.m. EDT

FROM THE ARCHIVES: June 24, 2002


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Credit Suisse Says CEO Not A Target In Swissair Probe

DOW JONES NEWSWIRES

ZURICH -- Credit Suisse Group (Z.CSG) said Monday that Chief Executive and supervisory board Chairman Lukas Muehlemann isn't the primary target in a police investigation into the collapse of Swissair Group AG (Z.SAG) and therefore the probe would have no consequences on Credit Suisse's business.

"The probe's focus isn't on (Muehlemann), he's only indirectly involved in it," Credit Suisse spokeswoman Claudia Kraaz told Dow Jones Newswires. Police entered Muehlemann's home last Tuesday and requested information on the Swissair case, she said. Muehlemann made the documents available voluntarily and is cooperating with the authorities.

The Swiss press reported that police seized documents tied to Swissair from several Swiss managers and businesses last week.

A district court in the canton of Zurich recently started a criminal probe against three former members of Swissair Group's executive board, in a bid to establish whether the upper management committed breaches between 1998 and 2001.

Muehlemann wasn't a member Swissair's executive board, but was a member of its supervisory board.

Documents have also been confiscated from other former Swissair board members last week, market watchers said.

-By Martin Gelnar, Dow Jones Newswires; +41-1-212-2181; martin.gelnar@dowjones.com

Updated June 24, 2002 6:40 a.m. EDT