Wiener Beteiligungs-GmbH under criticism: billions in losses due to Corona aid!

Wiener Beteiligungs-GmbH under criticism: billions in losses due to Corona aid!

“Stolz auf Wien Beteiligungs GmbH”, a company founded in 2020 by Wien Holding and the Vienna Chamber of Commerce, is in the crossfire of criticism. The Court of Auditors found that the company not only showed a lack of transparency when supporting companies that suffered from the Covid crisis, but also did not comply with its own selection criteria. Instead of only supporting companies that actually had a chance of recovery, funds flowed into companies that were already in difficulty before the pandemic. This becomes all the more serious when one considers that several of the “Proud of Vienna” target companies became insolvent in 2023, which calls into question the original intention of the support. Overall, the company is based on Garnisongasse in Vienna's 9th district and apparently plans to be liquidated by 2029, which affects the members of Wien Holding and other shareholders.

The financial losses that have occurred in recent years are particularly sensitive. In 2022 and 2023, “SaW II Beteiligungs GmbH”, whose managing directors are like those of “Stolz auf Wien”, had to write off over one million euros. This company, founded in March 2021, was originally aimed at smaller companies with lower capital requirements and supported them through loans with fixed interest rates. Wien Holding holds 15.89 percent of “SaW II”, while other shareholders are well-known business giants. Nevertheless, the exact number of companies supported remains unknown and the financial situation is tense: the paid-in capital fell from 4.1 million to 2.7 million euros, with a balance sheet loss of 1.445 million euros in 2023.

Bankruptcies on the rise

The situation is not only alarming for “Proud of Vienna” and “SaW II”, but also needs to be viewed in the larger Austrian context. EY forecasts suggest that corporate bankruptcies will increase in 2025. One area that could be particularly affected is the Real Estate & Construction segment, where the largest bankruptcies may already be history. Despite stabilized energy and material prices, economic development remains uncertain, which could have a negative impact on many companies. In addition, many companies have continuously experienced crises since 2020 and may no longer have the necessary reserves to absorb further setbacks.(EY predicts that how companies respond to the challenges will be crucial.)

A look at the Consumer Goods & Retail sector shows rising consumption trends, but companies must face challenges from changing purchasing behavior and serious competition from online retail. If you want to survive in the current climate battle, you need a good knack for innovation and adaptation.

All of these developments cast a shadow over the ongoing ambitions of Wien Holding and its associated companies. Questions of responsible corporate governance and effective support for companies in need must be the focus in the coming years. What happens next remains to be seen – the pressure on investments will increase and rethinking could be the only solution.

Further information can be found here and here.