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June 7, 2007 10:19 am

Former Swissair executives cleared

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Swiss judges on Thursday acquitted all 19 former Swissair executives and board members of crimes connected with the collapse of the bankrupt national flag carrier in 2001.

The defendants in Switzerland’s biggest corporate trial, including some former Swissair advisers, faced charges ranging from mismanagement to issuing misleading information and contributing to financial irregularities. Prosecutors had demanded sentences ranging from stiff fines to up to 30 months’ imprisonment in the case of Mario Corti, Swissair’s final chairman and chief executive.

“There is no evidence that the defendants knowingly acted to damage the company,” said Andreas Fischer, the chief judge.

The court ordered that the defendants’ legal costs, estimated at about SFr3m ($2.5m, €1.83m), be reimbursed.

The acquittals had been expected but representatives of the thousands of Swissair staff who lost their jobs, as well as creditors and bondholders, who in some cases lost life-savings, expressed disappointment at the outcome of the trial.

The case generated massive interest in Switzerland. Many of the accused claimed their lives and careers had been wrecked in the aftermath of the airline’s collapse.

Mr Corti, one of the most high profile defendants, moved to the US soon after Swissair’s fateful “grounding” in October 2001.

But while a few expressed “regret” in the dock at the turn of events, none admitted having broken the law, as prosecutors claimed.

Many declined to testify, for fear of incriminating themselves in possible civil cases yet to be heard. Civil actions are being pursued in Switzerland by liquidators of the former flag carrier.

Separately, in Belgium, the liquidator of Sabena, the national airline in which Swissair took a controlling stake, is also pressing for damages.

The collapse of Swissair, a company once as famous for its financial stability as the punctuality of its aircraft, resulted from ill-judged takeovers, exacerbated by the collapse of air travel after the September 11, 2001 terrorist attacks.

In the mid-1990s, Swissair embarked on an ambitious course of buying stakes in other airlines to grow outside its small home market. However, its chosen candidates were almost invariably loss makers, stretching Swissair’s finances and eventually triggering the liquidity crisis that led to the company’s collapse.

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