Bayerische Versorgungskammer (BVK), which manages €117bn for Bavaria’s professional pension funds, is challenging a Munich labour court ruling that found the extraordinary dismissal of former head of real estate investment management Reiner Komenda unlawful.
The court ruled yesterday that the “extraordinary dismissal” did not legally terminate the plaintiff’s employment relationship. The case concerned Komenda’s ousting over alleged compliance violations.
In a statement to IPE, BVK said the court did not address or question the underlying compliance allegations.
“The court focused solely on the timing of the summary dismissal and found that the formal requirements for such a dismissal were not met,” the pension fund said.
BVK will thoroughly review the judgment once the full reasoning is published and has already decided to appeal, having had exhausted all other available legal remedies to win the case, BVK told IPE.
Regardless of the court’s decision, BVK has issued a new summary dismissal of the former employee, citing fresh findings from a recent internal investigation.
The probe uncovered, among other issues, inappropriately close relationships between the senior employee and business partners, BVK said.
“These relationships manifested themselves, for example, in costly gifts, luxury trips and invitations, as well as systematic favouritism for the employee or family members,” according to BVK.
Komenda, who spent more than two decades at the pension fund managing assets for Bavarian professional pension funds (Versorgungswerke), was originally sacked last year.
IPE has contacted Henning Zander, lawyer at law firm Werwigk Henne Partnerschaft, which represented Komenda in the case, for additional comment.
BVK is facing €820m in losses from US real estate investments. Its total exposure in the US, including projects with Deutsche Finance and developer SHVO, is around €1.6bn. The fund highlighted three particularly high-risk developments and a renovation project at the Transamerica Pyramid in San Francisco.
The German pension fund for lawyers in Hessen has also written down €57.9m invested in the San Francisco landmark.
BVK pledged to continue enforcing its compliance guidelines, saying it will further strengthen its compliance organisation and early-warning systems.
