A police report has just been lodged against Flavio claiming criminal breach of trust (CBT) involving a cost cover and breakup fee amounting to Euro $2,223,933 and Euro $1,220,933 respectively, or RM17 million. The directors of KNM have gathered enough evidence of his wrongdoing before lodging the police report.
This incident happened when Flavio was the group's general counsel. He tried to sell Borsig to his friend Andreas Heeschen but Heeschen could not provide "proof of fund," so the deal fell through.
Flavio then tried to sell Borsig to another buddy, Vorsprung GmbH, which is a small, one-man show company run by Flavio's friend. At that time the market talk was that it was a case of an ikan bilis trying to swallow a whale. Borsig is big company that is almost 200 years old.
Flavio Porro
Now, because that ikan bilis didn't have the money, Flavio put in a cost coverage clause, ie. in this case the seller pays for the due diligence cost. That cost balloned from an amount mandated by the Board to an unlimited amount, authorised by Flavio. And it also comes with a break-up fee clause which is one-sided.
It's actually like you're trying to sell your house and you pay for all the legal fees, including for the buyer. And when the buyer is not able to get his bank loan, you pay him more to compensate him for his trouble trying to buy your house.
The break-up fee was eventually paid to Vorsprung because they can't complete the deal. The lenders rejected their loan applications. There were reports that Flavio was spotted having luxurious holidays with the buyer and their families when the sale process was on-going.
Let us pause and think. Is such a guy like Flavio really fit to be a director of KNM and run the business? From what we know now, the guy has got no integrity and he is a thief. We can't imagine what will happen to any business run by him.
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