Shipowner gets five years in prison for fraudulent state credit claims

The Swiss state currently underwrites 18 sea vessels operated by private shipowners. Keystone / Str

A former shipowner has been sentenced to five years in prison for having falsified claims about his fleet in order to receive credit guarantees from the Swiss state.

Hans-Jürg Grunder was convicted of fraud and criminal mismanagement in a Bern court on Thursday in a case estimated to have cost the Swiss state around CHF204 million ($217 million).

The 66-year-old, who until 2017 had operated a dozen ships, was accused of misleading the Federal Office for National Economic Supply into believing his companies were in a worse financial situation than they actually were, in order to benefit from more state credit guarantees.

Switzerland underwrites the debts of several ocean-going vessels that make up its merchant navy, which was formed just after the Second World War to guarantee supplies to the landlocked country. In return, Switzerland retains the right to requisition these ships in times of crisis.

Defence lawyers argued that Grunder had not acted to make personal gains. Rather he had been the victim of an unscrupulous business partner, as well as the 2008 global financial crisis, they said.

They had argued for the overturning of all charges, which they claimed were unfounded and unfairly aimed at Grunder, rather than others involved in the affair. Prosecution lawyers had called for a prison sentence of seven-and-a-half years.

Switzerland is in the process of downsizing its merchant navy fleet following a downturn in shipping freight and the emergence of other means to keep the country supplied. The demobilisation process will cost CHF300 million.

Currently, 18 vessels are in operation for the merchant navy, underwritten by the state to the tune of CHF333.9 million, reports the Keystone-SDA news agency. They are owned by four shipowners operating 10 shipping companies.