Mirko Kovats
Encyclopedia
Mirko Kovats is an Austria
n investor mainly known for his role as founder, majority owner (indirectly, through his private foundation known as "MUST") and chairman of the Austrian Traded Index
listed company A-TEC Industries, one of the largest industrial groups in Austria
. He has been cited as a respresentative example of a businessman in Austria who places shareholder value
above all else.
, Austria
, in 1948 as the son of Hungarian immigrants. He studied Commercial Sciences at the University of World Trade
and gained a doctorate at the age of 23 years.
He is married and has two sons.
countries.
After the 1989 collapse of the Soviet bloc, he entered a new field of employment, developing office and hotel projects and investing in real estate. In the 1990s Kovats participated, together with his partner Dr. Mock, in several nightclubs (including U4 in Vienna, A2 South Pole in Vösendorf
, and Tanzpalast in Baden
, Vienna-Wight Work, Dorian Gray in Korneuburg
.
machine tool factory Emco. This was later followed by other main pillars of the group: ATB Austria Antriebstechnik, Montanwerke Brixlegg and Austrian Energy & Environment. Through acquisitions Kovats continuously expanded his industrial holding company
. Mostly he buys economically struggling companies with high "turnaround potential" at a reasonable price, and succeeds within a few years to reorganize and make a profit. Today more than 70 companies with more than 10000 employees are in the group which has a turnover of well over 1 billion euros.
Multiple Kovats has been sued under civil law. Also, he has been criminally indicted twice:
Small investors accuse Kovats damaging the reputation of A-TEC and harming its stock price by his business practices. They call for more transparency. A-TEC shares stood at €100 in December 2006 and in October 2008 reached a historic low of €7.81.
The 2008 documentary Let's Make Money by Erwin Wagenhofer
shows him making highly controversial statements about industrial relations in his Indian factories.
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
n investor mainly known for his role as founder, majority owner (indirectly, through his private foundation known as "MUST") and chairman of the Austrian Traded Index
Austrian Traded Index
The Austrian Traded Index is the most important stock market index of the Wiener Börse and the largest trading place in the Austrian economy...
listed company A-TEC Industries, one of the largest industrial groups in Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
. He has been cited as a respresentative example of a businessman in Austria who places shareholder value
Shareholder value
Shareholder value is a business term, sometimes phrased as shareholder value maximization or as the shareholder value model, which implies that the ultimate measure of a company's success is the extent to which it enriches shareholders...
above all else.
Private Life
Kovats was born in ViennaVienna
Vienna is the capital and largest city of the Republic of Austria and one of the nine states of Austria. Vienna is Austria's primary city, with a population of about 1.723 million , and is by far the largest city in Austria, as well as its cultural, economic, and political centre...
, Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
, in 1948 as the son of Hungarian immigrants. He studied Commercial Sciences at the University of World Trade
Vienna University of Economics and Business
Wirtschaftsuniversität Wien or Vienna University of Economics and Business is the largest University focusing on business and economics in Europe and, in terms of student body, one of the largest universities in Austria...
and gained a doctorate at the age of 23 years.
He is married and has two sons.
Early operation (until 1997)
After graduation Kovats worked in the 1980s as a dealer in machines with the ComeconComecon
The Council for Mutual Economic Assistance , 1949–1991, was an economic organisation under hegemony of Soviet Union comprising the countries of the Eastern Bloc along with a number of communist states elsewhere in the world...
countries.
After the 1989 collapse of the Soviet bloc, he entered a new field of employment, developing office and hotel projects and investing in real estate. In the 1990s Kovats participated, together with his partner Dr. Mock, in several nightclubs (including U4 in Vienna, A2 South Pole in Vösendorf
Vösendorf
Vösendorf is a town in the district of Mödling in the Austrian state of Lower Austria....
, and Tanzpalast in Baden
Baden
Baden is a historical state on the east bank of the Rhine in the southwest of Germany, now the western part of the Baden-Württemberg of Germany....
, Vienna-Wight Work, Dorian Gray in Korneuburg
Korneuburg
Korneuburg is a town in Austria. It is located in the state Lower Austria and is the administrative center of the district of Korneuburg. Korneuburg is situated on the left bank of the Danube, opposite the city of Klosterneuburg, and is 12 km northwest of Vienna...
.
Establishment of A-TEC
From the end of the 1990s Kovats began building his group A-TEC Industries. He laid the foundation in 1997 by acquiring 50% of the shares in the SalzburgSalzburg
-Population development:In 1935, the population significantly increased when Salzburg absorbed adjacent municipalities. After World War II, numerous refugees found a new home in the city. New residential space was created for American soldiers of the postwar Occupation, and could be used for...
machine tool factory Emco. This was later followed by other main pillars of the group: ATB Austria Antriebstechnik, Montanwerke Brixlegg and Austrian Energy & Environment. Through acquisitions Kovats continuously expanded his industrial holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
. Mostly he buys economically struggling companies with high "turnaround potential" at a reasonable price, and succeeds within a few years to reorganize and make a profit. Today more than 70 companies with more than 10000 employees are in the group which has a turnover of well over 1 billion euros.
Criticism
Due to his unconventional business practices and methods of financing and his sometimes spectacular transactions Kovats has repeatedly been accused of risky, unfair or even criminal activity. In the early phase of his business operations (before 1997) numerous companies in which Kovats was directly or indirectly involved in became insolvent. The Austrian investigative journalist Hans Pretterebner announced in 2007 that he was writing a book on economic crime in which a chapter is devoted to Kovats's career and especially the aforementioned insolvencies.Multiple Kovats has been sued under civil law. Also, he has been criminally indicted twice:
- In 2000 the Vienna High Court sentenced Kovats to six months' probation for offenses in connection with the bankruptcy of the nightclub "Dorian Gray".
- In July 2007, the Vienna public prosecutor's office announced that it was starting proceedings against Kovats for fraud in connection with the insolvency of the nightclub "A2 south pole". If convicted he is threatened with a prison sentence as a repeat offender. The trial began on 17 September 2007.
Small investors accuse Kovats damaging the reputation of A-TEC and harming its stock price by his business practices. They call for more transparency. A-TEC shares stood at €100 in December 2006 and in October 2008 reached a historic low of €7.81.
The 2008 documentary Let's Make Money by Erwin Wagenhofer
Erwin Wagenhofer
Erwin Wagenhofer is an Austrian author and film director.In 1981 he presented his first short film Endstation normal. Two years later his short film Das Loch was shown at the Krakau film festival. From that year until 1987 he worked as a directing and camera assistant for several ORF productions...
shows him making highly controversial statements about industrial relations in his Indian factories.