‘Red Fini’ And The Case Of Missing East German Millions

rote fini
Rudolfine Steindling took her secrets to the grave. She died in 2012 at the age of 78.
  • Why it matters

    Why it matters

    Germany is suing the Swiss bank Julius Bär to recover money that disappeared along a murky trail of withdrawals and investments. It is seeking €135 million ($178 million) in damages.

  • Facts


    • As top manager of the Novum company, Rudolfine Steindling’s clients included Bosch, Ciba-Geigy, Voestalpine and Steyr Daimler Puch.
    • In 2013, Bank Austria lost a court battle with BvS, the German agency charged with tracking down East German money.
    • Germany is targeting Julius Bär, which in 2005 acquired CantradePrivatbank. Cantrade is accused of helping move the lost money to a safe haven.
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Rudolfine Steindling belonged to the upper crust of Austrian society – she wore expensive clothes and maintained a luxurious lifestyle. But she always remained an ardent advocate for Communism.

In 1951, the former East German regime became aware of “Red Fini,” as she came to be known. The government needed someone to supervise foreign trade and exchange dealings from abroad.

So the East German authorities set up the Novum company in Austria and made Ms. Steindling its top manager and sole shareholder. No Western company that wanted to do business with the East German state could ignore the well-clad lady and her fiduciary firm. She represented businesses such as Bosch, Ciba-Geigy, Voestalpine and Steyr Daimler Puch in dealings with East Germany. Ms. Steindling herself received fees in the millions and invested the money with her local bank, Bank Austria.

Her story is inseparable from the search for East German billions that the German government laid claim to after reunification.

Beginning with the fall of the Berlin Wall in 1989, however, it was clear that the bank deposits of Novum actually belonged to the legal successor of East Germany – the Federal Republic of Germany. The only problem was that “Red Fini” didn’t intend to give up a single penny.

Ms. Steindling’s story is inseparable from the search for East German billions that the German government laid claim to after reunification. It even created an agency for that sole purpose, the Federal Agency for Special Tasks related to Reunification or BvS, for short, which was charged with tracking down the money.

Up to now, though, not much has been found.

At first Ms. Steindling maneuvered the Novum millions into accounts of the Swiss bank Cantrade, a subsidiary of UBS Bank, and into accounts of AKB Privatbank in Zurich. A Communist has a heap of money, then transfers it to capitalist Switzerland: Ms. Steindling scarcely gave thought to the irony.

She subsequently turned the money into cash in 51 withdrawals and hid the bills in safes at the banks. Later, she invested the money in anonymous savings accounts and investment portfolios. All traces disappeared.

Anyone who knew Ms. Steindling, who died in 2012 at age 76, understands that she always kept herself under strict control. She was not a machine, but nor was she particularly emotional.

Nonetheless, the question arises: Could any one individual accomplish all that alone? For a long time, there were rumors that former East German officials helped her. Investigations and tips about possible accomplices came up empty each time, like tracks disappearing in the snow of the Swiss Alps.

julius baer
The entrance of the headquarters of Swiss bank Julius Baer in Zurich. Source: Reuters


So German officials changed their tactics and initiated proceedings against the banks that helped Ms. Steindling: Bank Austria and Julius Bär in Zurich.

In 1996, Germany first took on Bank Austria.  A court at the first level of jurisdiction decided against the Germans. The affair could not be completely brought to light because an important document was missing, namely the trusteeship declaration of Ms. Steindling. It had disappeared over the course of judicial proceedings, which lasted for years.

For her part, “Red Fini” developed a new plan in the meantime. In spite of her initial court victory, she withdrew 450 million marks from her Swiss accounts and transferred the money back and forth between Vienna and Zurich. Ultimately, the money trail could no longer be traced.

But for Bank Austria the continuing investigation is a financial nightmare. In 2013, the Austrian subsidiary of the Italian bank Unicredit lost a court battle with BvS, the German agency charged with tracking down the lost money.  It was ordered to pay the breathtaking sum of €254 million. An appeal was rejected by the Swiss federal court, said Dieter Freund, formerly with BvS. “The payment of the aforementioned sum was made.”

Anyone who knew Ms. Steindling understands that she was always kept herself under strict control.

Now the next judicial proceedings are in progress. BvS is suing the Swiss bank Julius Bär for damages amounting to €135 million, or about $180 million. At the core, the accusations are directed against Cantrade Privatbank, which Julius Bär took over in 2005 from the large Swiss bank UBS. Germany believes that as legal successor, Julius Bär is liable.

The official allegation: Cantrade “allowed between 1989 and 1992 unauthorized withdrawals from the account of a foreign-trade company founded by a former (East German) official.” In simple terms, the bank is accused of having aided Ms. Steindling – and possibly a few front men – in transferring the money to a safe haven. After the fall of the Berlin Wall, “the account was secretly emptied by former (East German) officials,” according to a Swiss news account (, which cited a spokesperson for a German governmental agency.

No agreement was reached in May of this year during an attempt at arbitration by a magistrate in Zurich. Instead, the judge issued authorization to file a lawsuit, and BvS sued in district court in Zurich.

The controversy flared up at a very bad time for the Swiss bank. It is among other Swiss institutions now in negotiations with U.S. authorities over allegations of aiding tax evasion. Julius Bär is accused of helping U.S. citizens avoid taxes, and a financial penalty is certain.

Cantrade is said to have cultivated contacts to East Germany in the 1960s during the height of the Cold War. And it is accused of involvement in weapons deals by the former Communist country. In its final years, East Germany sold massive amounts of military equipment to other countries, including the United States.

For Germany, the case is clear: Cantrade should not have allowed former East German officials to gain access to the Novum millions. The Swiss are of another opinion.

In its semi-annual report, the bank mentioned the legal controversy with German authorities. It disputes the legitimacy of the German claims “and has taken measures to protect its interest. In addition, the demands of (BvS) have been registered under the terms of the transaction agreement from 2005 in the framework of assurances given to the acquired companies.” Put simply, Julius Bär does not consider itself liable but is passing responsibility on to the former owner UBS. The latter declines any thought of liability.

Nonetheless, many consider it possible that Julius Bär may have deliberately risked the possibility of a lawsuit. For juridical reasons, it is difficult to investigate the case in detail – because the money could actually reside in a safe-deposit box. It is quite possible that the bank factored in a potential lawsuit – or even requested it explicitly. This would give Julius Bär the legal right to examine its own safe-deposit boxes in order to come a little closer to the truth.

Experts consider it possible that, just as in the case of Bank Austria, Germany could be successful in its bid. Conversely, Julius Bär’s chances are seen to be slim.


Ozan Demircan: Hans-Peter Siebenhaar:


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