An ongoing investigation in Austria into alleged corruption by the Chief Executive of Ainsworth Game Technology (AGT) during his time as CEO of Novomatic AG has made headlines in Australia just weeks before a takeover agreement between the two companies is voted on by AGT shareholders.
Harald Neumann, who took over as AGT CEO in September 2021 some 18 months after stepping down from Novomatic, was named by ABC News late last week as being part of a six-year old investigation into the Austrian gaming giant for suspected bribery and illicit political funding.
Neumann has denied all allegations, while an AGT spokesperson told ABC News that only one investigation related to Neumann remains “and it is anticipated that this will be similarly dismissed.”
While the broader investigation into Novomatic has been a major talking point in Austria since it was first launched by the country’s Public Prosecutor’s Office in 2019, the timing of the story gaining traction in AGT’s home base of Australia is curious.
The ASX-listed company announced in late April that it planned to enter a Scheme of Agreement with Novomatic – which owns a controlling 52.9% stake in AGT – for Novomatic to acquire all outstanding AGT shares as part of an AU$158.6 million (US$102 million) takeover agreement, pending regulatory and shareholder approval, thus seeing Novomatic owning 100% of AGT.
The deal is subject to the approval of AGT shareholders, and a vote is expected to take place in August, with AGT’s Board of Directors recommending a vote in favor. However, last month Kjerulf Ainsworth – the sixth son of company founder Len Ainsworth and AGT’s second largest individual shareholder with a 12% stake – revealed that he and his mother were hatching a plan to stop the takeover from going ahead.
“We’ve got money to go and throw some serious punches,” he was quoted as saying by local media. “It’s hard not to be motivated if you see two- or three-dozen shareholders all getting stiffed.”
The investigations into Novomatic include allegations that it offered donations to the right-wing Austrian People’s Party in return for assistance in a case against the company in Italy.
Austria’s Public Prosecutions Office stated in 2021 that the investigations were “based on the suspicion that a responsible person at a gambling company offered donations to a political party in return for support from officials of the Republic of Austria in a tax claim case abroad which is threatening the company.”
That responsible person is said to have been Neumann, with Austrian media outlet Profil publishing at the time several text messages it claimed were exchanged between the then-Novomatic CEO and People’s Party member Gernot Blümel, described as a close ally of then-Chancellor Sebastian Kurz. According to Profil, those text messages indicated that Blümel had been “opening doors” for Neumann, including that of Kurz.
ABC News also referenced last week alleged attempts by Novomatic to influence an appointment to the board of partly state-owned casino operator Casinos Austria. It is alleged that the potential appointee may have been able to assist to bring about legislative changes that would be favorable to both companies’ interests.
AGT is quoted by ABC News in response to its inquiries that “All (except for one) of the investigations involving Mr Harald Neumann and/or Novomatic AG have been dismissed.
“It is our understanding that the one remaining investigation is largely complete, and it is anticipated that this will be similarly dismissed.
“Mr Neumann has strenuously denied all the allegations and has provided the Ainsworth [Gaming Technology] Board of Directors and Regulatory Compliance Committee (RCC) with regular and detailed reports regarding the status of the [Austrian] investigations.”
