Smurfit firm cited in Holocaust victims' action

An Austrian paper company controlled by Jefferson Smurfit Group has been cited in a class action by Holocaust victims for Nazi era damages.

Smurfit owns 75 per cent of Nettingsdorfer Papierfabrik and agreed last week to pay €54.8 million (£43.2 million) to buy out the remaining 25 per cent by July 2003.

That stake will be acquired from members of the Austria-based Stepski family.

Smurfit first took a minority stake in the company, which has interests also in Italy and Malta, in 1995.

Nettingsdorfer is one of thousands cited in a class action taken last April by a group of more than 10,000 Holocaust victims, according to a New York lawyer, Mr Ed Fagan, who is lead counsel in the case.

Companies cited in the action are alleged to have used Jews for slave labour and to have seized the assets of Jewish firms in 1938-1945, he said.

Mr Fagan has previously brought actions against Swiss banks and against companies in Germany and Japan.

More than 65,000 of Vienna's pre-war Jewish population of 185,000 perished in the Holocaust, and the remainder fled the country, leaving most of their possessions.

Jewish apartments were pillaged, works of art and antiquities carried away, and small shops were taken over without compensation.

In October, the Austrian government and Austrian industry association agreed to establish a $380 million (€408 million) fund to compensate thousands of people who worked as slave or forced labourers during the second World War.

Separately, the government offered last week to establish a fund worth $300 million to compensate Jews whose property and businesses were stolen during the Nazi era.

This was twice the sum proposed for the fund in October, but agreement was not reached in talks between the US and Austrian governments, in addition to the Congress of Jewish Material Claims and parties to Mr Fagan's action.

Further talks between the Austrian and US governments are scheduled for January. It is thought there will be a push to reach a final settlement before President Clinton leaves office on January 20th.

The US negotiating team is led by Deputy Treasury Secretary, Mr Stuart Eizenstat, who negotiated settlements with both Germany and Switzerland. Mr Eizenstat described Austria's original offer as insufficient.

According to Mr Fagan, individual firms cited in the actions can choose to make a contribution to the settlement funds.

The extent of Nettingsdorfer's ultimate liability is unknown. Attempts last night to contact Smurfit's spokeswoman failed.

Insurance and industrial associations in Austria have argued against the establishment of a compensation fund for "Aryanised" property, pointing out that they have already paid into the labour fund.