county of queens rakesh sardana, : 709438/2015€¦ · business practices, and to fraudulently...

RICH MICHAELSON MAGALIFF MOSER, LLP 335 Madison Avenue, 9th Floor New York, NY 10017 646.453.7851 Howard P. Magaliff Robert N. Michaelson Attorneys for Plaintiffs

STACEY RICHMAN Law Offices of Richman Hill & Associates PLLC 2027 Williamsbridge Road Bronx, NY 10461 (718) 892-8588 Co-Counsel for Plaintiffs

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS --------------------------------------------------------------------x SAVERIA JFK, INC., SAVERIA USA, INC. and : RAKESH SARDANA, :

: Plaintiffs, :

: v. :

: FLUGHAFEN WIEN, AG a/k/a VIENNA : INTERNATIONAL AIRPORT PLC, :

: Defendant. :

--------------------------------------------------------------------x

Index No.

COMPLAINT

JURY TRIAL DEMANDED

Plaintiffs Saveria JFK, Inc. (“Saveria JFK”), Saveria USA, Inc. (“Saveria USA”)

and Rakesh Sardana (“Sardana” and together with Saveria JFK and Saveria USA, “Plaintiffs”),

as and for their complaint against Flughafen Wien, AG a/k/a Vienna International Airport plc

(“VIE”, “Vienna Airport” or the “Defendant”), allege the following upon knowledge as to their

own acts and otherwise upon information and belief:

INTRODUCTION

1. On September 14, 2013, Peter Hochegger (“Hochegger”) revealed to

Rakesh Sardana the existence of a “dirty and illegal campaign,” financed by Vienna Airport, to

ruin Sardana’s New York-based businesses. On that day, Hochegger told Sardana for the first

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709438/2015

time that a covert strategy to discredit and destroy Sardana and his businesses in Vienna – con-

ceived, designed and implemented by Hochegger and others at the behest of the Defendant – had

also been directed at Sardana’s business at John F. Kennedy International Airport (“JFK Air-

port”) in New York – a fact that he had previously denied in earlier conversations with Sardana.

Hochegger admitted that he had lied to Sardana and knowingly concealed the Defendant’s inten-

tions and activities in New York from Sardana.

2. On September 17, 2013, after confessing to Sardana, Hochegger executed

an affidavit, sworn to before Mark A. Brand, the Vice Consul at the U.S. Embassy in the Repub-

lic of Austria, in which he stated:

In 2003/2004, my company was assigned and awarded the project to undertake dirty campaigning to malign and destroy the reputa-tion of Mr Rakesh Sardana and his New York based subsidiary, Saveria JFK Inc, together with a leading Vienna based law firm at the behest of Vienna International Airport Plc (VIE AG) by Mr Herbert Kaufmann (CEO), Mr Gerhard Schmid (COO) and Mr Kurt Waniek (CFO), who were then the members of Executive Board of Directors and the top management of Vienna Internation-al Airport plc (VIE). (Emphasis added).

3. As alleged in this Complaint, the Defendant’s goal was to ruin Sardana

economically, in New York and internationally. Among the means employed to destroy Sarda-

na’s New York business – Plaintiff Saveria JFK – were spreading false stories about him and his

business practices, and to fraudulently conceal, mislead and lie about the goal. Beginning in

2003, Hochegger had developed and implemented, at Defendant’s request, the “Master Plan for

Securing the Economic Site ‘Vienna Airport’ in the Long Term” (the “Master Plan”), which laid

out a series of secret steps to be taken in a concerted effort to ruin Sardana. The campaign

against Sardana was based on a mixture of half-truths and lies, with just enough actual truths

sprinkled in give it a veneer of legitimacy, that were designed with a singular purpose – the com-

plete economic destruction of Rakesh Sardana. The systematic and thorough implementation of

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the Master Plan against “the Indian” – as he was referred to by the Defendant – succeeded in

achieving VIE’s intentions. Kurt Waniek, at the time Vienna Airport’s CFO, summed it up thus:

VIE’s goal, he told Hochegger, was to “send the Indian only with a nylon shopping bag with a

one-way ticket back to India.”

4. As a direct result of VIE’s actions, Sardana, a successful operator of 18

specialty retail shops in Terminal 4 at JFK Airport and 45 specialty retail shops at Vienna Air-

port, lost tens of millions of dollars in profits and expansion opportunities at JFK Airport in New

York, lost all of his businesses at Vienna Airport, and lost numerous opportunities to develop

retail stores at international airports around the world.

5. Plaintiffs bring this action to recover for damages exceeding $168,000,000

sustained as a result of VIE’s secret, continuing and tortious conspiracy to destroy Sardana’s

businesses in New York and throughout the world.

THE PARTIES

6. Sardana was born in India and is a naturalized citizen of the Federal Re-

public of Austria (“Austria”) who conducts business in New York through his wholly-owned

entity Saveria JFK. At all times relevant to this Complaint, Sardana was the 100% shareholder

and owner of Saveria JFK. At all times relevant to this Complaint, Saveria JFK was the 100%

shareholder and owner of Saveria USA.1

7. Defendant VIE is the owner and operator of the Vienna International Air-

port. VIE is a corporation organized and existing under the laws of Austria, with its headquarters

in Vienna. VIE is a publicly traded company, listed on the Vienna stock exchange. VIE has two

main government shareholders: the city and state of Vienna, and the province of Niederösterreich

1 On July 15, 2013, the equity of Saveria JFK was sold to Sagar, Inc., a Sardana family company. On April 21, 2015, the assets of Saveria USA and 80% of the equity interests were sold to LS and Partners at JFK, Inc. Sagar, Inc. and Sardana retained a 20% equity stake in Saveria USA.

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(“Lower Austria”), each of which owns 20% of the shares.2 Through a syndication agreement,

these two government shareholders exercise control over VIE’s operations. Thus, the city of Vi-

enna and the state of Lower Austria, acting through their elected officials, appoint the Manage-

ment Board and the Supervisory Board of VIE.

RELEVANT NON-PARTIES

8. Erwin Pröll (“Pröll”) is the governor of the state of Lower Austria and a

resident of Austria. Pröll has significant influence over the appointment of the members of the

Management Board and the Supervisory Board of VIE. Pröll knows Sardana personally and at

relevant times knew about the Master Plan.

9. Michael Häupl (“Häupl”) is the mayor of the city of Vienna, the governor

of the state of Vienna and a resident of Austria. Häupl is able to and does influence the appoint-

ment of the members of the Management Board as well as the Supervisory Board of VIE. Häupl

knows Sardana personally and at relevant times knew about the Master Plan.

10. Herbert Kaufmann (“Kaufmann”) is a resident of Austria. Kaufmann was

the Chief Executive Officer of VIE between 1999 and 2010 and involved with the underlying

relevant events.

11. Gerhard Schmid (“Schmid”) is a resident of Austria. Schmid was the

Chief Operating Officer of VIE between 1999 and 2010 and involved with the underlying rele-

vant events.

12. Johannes Coreth (“Coreth”) is a resident of Austria. Coreth was the Presi-

dent of the Board of Directors of VIE between 1996 and 2009 and involved with the underlying

relevant events.

2 Vienna Airport employees own 10% of the shares, and the remaining 50% are “free float” or public shares. As of December 31, 2004, 5.1% of the shares were owned by a New York limited liability company.

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13. Christoph Herbst (“Herbst”) is a resident of Austria. Herbst was the Chief

Executive Officer of VIE between 2010 and 2011 and involved with the underlying relevant

events.

14. Julian Jäger (“Jäger”) is a resident of Austria. Jäger is currently one of the

two Chief Operating Officers of VIE. Jäger was a manager in VIE’s legal department in 2004

involved at the time with the underlying relevant events.

15. Erwin Hameseder (“Hameseder”) is a resident of Austria. Hameseder is

currently the Vice President of the Supervisory Board of VIE and a member of the Supervisory

Board of VIE since 2002. Hameseder, Jäger, Herbst, Coreth, Schmid and Kaufmann are some-

times referred to herein as the “Non-Defendant VIE Officers and Directors”).

JURISDICTION AND VENUE

16. This Court has personal jurisdiction over Defendant VIE under CPLR

§ 302 because, (i) acting alone and through its agent in New York, VIE committed tortious acts

outside of New York causing injury to plaintiffs within New York, (ii) VIE expected or should

reasonably have expected such acts to have consequences in New York, and (iii) VIE derives

substantial revenue from interstate or international commerce.

17. Venue is proper in Queens County pursuant to CPLR § 503(c) because

Plaintiffs’ principal office is in Queens County.

FACT ALLEGATIONS

18. Hochegger’s confession to Sardana on September 14, 2013 was the culmi-

nation of a more than decade-long ongoing conspiracy to destroy “the Indian”. Sardana’s suc-

cess generated substantial profits for Vienna Airport and created extraordinary opportunities for

international growth and expansion of specialty retail shops at airports including in Terminal 4 at

JFK Airport.

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19. Despite this, the facts lead to the ineluctable conclusion that the Defendant

viewed “the Indian” as a threat to its own designs. In an affidavit sworn to on September 17,

2013, Siegfried Gangl, the former Senior Executive Vice President responsible for finance and

international expansion at VIE until 2002, said: “I can further state and testify that in several

Executive Management meetings and within the VIE corporate culture, Mr Sardana was gener-

ally referred in derogatory terms due to his ethnicity and national origins with impunity resulting

in institutional racial discrimination.”

Rakesh Sardana and The Sardana Group of Companies

20. Rakesh Sardana is an expert in owning, operating and managing “specialty

retail” shops at airports. At all times relevant to this Complaint, Sardana owned and profitably

operated 18 specialty retail airport shops in Terminal 4 at John F. Kennedy International Airport

in New York (“Terminal 4”), including the iconic American brands Kenneth Cole and DKNY,

and international luxury brands such as Salvatore Ferragamo, Ermenegildo Zegna, Hugo Boss

and Hermès.

21. Sardana arrived in Austria in 1975 by hitchhiking overland via Afghani-

stan, Iran, Northern Iraq, Turkey, Bulgaria and the former Yugoslavia before settling in Austria.

He reached Austria with only about US $70 in his pocket. His original intention was to meet his

elder sister, who along with her family had been expelled by the dictator Idi Amin Dada of

Uganda. Sardana yearned ultimately to be in the United States but his sister persuaded him to

remain in Austria. Sardana started a new life as an immigrant in Austria with nothing but his

business acumen and innate confidence.

22. Sardana was a talented merchandiser, and soon established his own busi-

ness in Vienna. At the beginning he sold cheap goods on the street. Year by year Sardana’s

business grew and he attained distinction as a trusted businessman.

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23. In 1983, Sardana started as a retailer at Vienna Airport. He began with

only one retail shop, and was able, due to his diligence and creativity, to introduce and realize

new and innovative business ideas. Due to his excellent international contacts, Sardana soon

established international brands such as Harrods, Caviar House, Bally, Swarovski, Salvatore Fer-

ragamo, ETRO, Zilli, Longchamp, Ermenegildo Zegna, Geox, Desigual and Hermès at Vienna

Airport. As a result, Sardana systematically enlarged the number of shops operated by the Sar-

dana Group of companies (“Sardana Group”), eventually reaching 45 shops and becoming the

largest retailer at Vienna Airport.

24. Sardana’s success as a retailer at Vienna Airport proved to be significant

when VIE decided to go public in 1992 and started trading its shares on the Vienna Stock Ex-

change. VIE was able to demonstrate to institutional investors the existing high international

level of the retail business at Vienna Airport, which in turn contributed to the success of the ini-

tial public offering. The performance of the Sardana Group at Vienna Airport turned out, over

many years, to be a “win-win” for both VIE and the Sardana Group.

25. As the Sardana Group continued to grow and flourish at Vienna Airport,

so did VIE: the growth of Sardana’s retail shops resulted in a continuous increase in rent reve-

nues for VIE.

26. In 1996, Sardana founded VIE Shops Entwicklungs und Betriebsgesell-

schaftmbH (“VIE Shops”) with VIE’s blessing. On or about November 27, 1996, Sardana and

VIE entered into a cooperation agreement (the “Cooperation Agreement”) as joint venture part-

ners to develop specialty retail shops at other international airports. Sardana, as the management

and operational expert, was to seek out opportunities at the airports. These international airport

projects would be supported and promoted by VIE and Sardana would own and operate these

projects similar to the retail specialty shops at VIE. This type of financial arrangement would be

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profitable for VIE because, in addition to recouping its investment funding advanced for the pro-

jects, VIE would also receive a substantial portion of the profits. In 1998, VIE became a 51%

shareholder of VIE Shops. Sardana held the other 49%.

27. Under the Cooperation Agreement, Sardana was obligated to perform all

international retail activities exclusively through VIE Shops. Vienna Airport, as the 51% owner

and financial partner in the joint venture, could withhold funding for a proposed project, thereby

effectively preventing Sardana from developing the opportunity unless VIE agreed to release

Sardana from his joint venture obligations. Sardana expected, however, that VIE would act in a

manner that was consistent with its fiduciary duties as a partner as well as in its own best busi-

ness interests, and that if VIE were to withhold its consent to a particular project, it would be

based upon objective business considerations and not, as Sardana came to learn years later, on a

secret conspiracy to destroy “the Indian” and his businesses.

28. The first project that was to be undertaken by the jointly-owned VIE

Shops was the development and operation of new retail shops in the east and west concourses of

Vienna Airport. Sardana developed a detailed concept for the shops and presented it to the VIE

management board (the “Board”) for approval. VIE never responded to the proposal and Sarda-

na was unable to capitalize on the opportunity. Sardana learned later that VIE had appropriated

his concept and awarded the retail development rights Johann Riedl – an Austrian company and

Sardana competitor – without competitive bidding. In short, VIE maliciously harmed its new

partner at the very first opportunity.

29. Despite this obviously inauspicious start to the joint venture, Sardana con-

tinued to discuss with VIE ways in which they could develop business opportunities. After

lengthy discussions, VIE insisted that VIE Shops be used for projects at foreign, international

airports, including JFK Airport, to benefit from the existing know-how of both parties. At the

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time, VIE was actively involved in acquisitions concerning the privatization of foreign airports.

VIE considered Sardana’s retail expertise to be extremely beneficial to these endeavors.

30. In 1999, the management of VIE changed and a new Board was installed.

Herbert Kaufmann replaced Gerhard Kastelic as the CEO of Vienna Airport; Gerhard Schmid

became COO; and Kurt Waniek (now deceased) became CFO. The new Board was extremely

hostile to Sardana. Despite the Cooperation Agreement with Sardana and majority ownership in

VIE Shops, the Board announced that VIE would no longer support the expansion of the Sardana

Group, which at that time controlled approximately one-third (⅓) of the total retail space at Vi-

enna Airport.

Development of the JFK Terminal 4 Project

31. The Terminal 4 project began in the dark shadow of 9/11, and came to fru-

ition solely because of Sardana’s commitment to support the United States of America in its

darkest hour, even though the Defendant actively but secretly sought to prevent the project from

going forward. On September 10, 2001, Sardana was a guest at the gala dinner of the Airports

Council International (North America). During that dinner, Sardana was informally invited to

submit a proposal for an initial 16 retail locations comprising approximately 16,000 square feet

in the new Terminal 4 at JFK Airport. The next day, September 11, 2001, the terrorists struck

New York City. Despite the severity of the attacks and the resulting economic slump that fol-

lowed, Sardana listened to his inner instincts and followed up on the JFK Airport project. Sarda-

na wanted to stand shoulder-to-shoulder with the Americans, and in his own humble way con-

tribute to New York in those times of trial.

32. In 2002, after detailed negotiations and project presentation, Sardana suc-

cessfully secured a “Use and Occupancy Permit” from JFK International Air Terminal LLC

(“JFKIAT”) in Jamaica, New York. In February 2002, Sardana formed Saveria JFK to be the

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designated contractual partner of JFKIAT. On June 6, 2002, Saveria JFK signed a 3-year lease

with a 7-year renewal option with JFKIAT, with the right to transfer the lease to the Sardana

Group which included VIE Shops. Sardana was to operate the specialty retail shops in Terminal

4 identical to the shops he operated at the Vienna Airport.

33. Consistent with the Cooperation Agreement, Sardana informed the CEO

of VIE, Kaufmann, about the proposed Terminal 4 project. Kaufmann congratulated Sardana,

and VIE management initially showed great interest in the project. Nonetheless, the Board

withheld its consent to participate and would not commit funding for the project, nor would it

release Sardana from his obligations under the Cooperation Agreement to permit Saveria JFK to

operate the Terminal 4 project on a stand-alone basis.

34. The Board saw the Terminal 4 project as a means to leverage its relation-

ship with Sardana to advance its goal of ruining “the Indian.” Before the Board would consent to

the proposal, it insisted that Sardana agree to numerous financially damaging concessions at Vi-

enna Airport, such as changes in the merchandise mix, reduction of shop footage and the return

of retail shops to VIE – concessions that were completely unrelated to the JFK Airport Terminal

4 project. Agreeing to these concessions would lead to significant economic harm for Sardana

and his business.

35. By late summer of 2002, all relevant departments of VIE (finance, retail,

legal and business development) which the Board had asked to opine on the Terminal 4 project

unanimously agreed to promote the project. Having been led to believe that the unrelated con-

cessions were a condition of VIE’s consent to the JFK project and in light of the unanimous

agreement by internal VIE departments, Sardana – committed to investing in America after the

9/11 terrorist attacks – agreed to the demands, even though the result caused him economic

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harm. Sardana and VIE entered into a Memorandum of Understanding (“MOU”) dated October

4, 2002 amending and extending Sardana’s Vienna Airport lease until 2012.

36. With a short timeframe within which to commit to JFKIAT to go forward

with the Terminal 4 project, Sardana now expected VIE’s consent to be forthcoming. It was not.

Inexplicably, the VIE Board led by Kaufmann and Schmid and other Non-Defendant VIE Offic-

ers and Directors still delayed giving consent to Sardana to finalize the deal and move forward.

With only a few weeks before the option would expire, after obtaining the concessions at Vienna

Airport, the Board abruptly withdrew from the project completely, with no explanation offered

to Sardana. This decision was incomprehensible, as the Board’s own due diligence strongly sup-

ported going forward with the Terminal 4 project, and the project had been unanimously ap-

proved internally. Unbeknownst to Sardana at the time, the real reason for the refusal to support

Sardana’s bid was the Board’s overwhelming (and completely unjustified) desire to ruin “the

Indian”.

37. VIE’s sudden and baffling refusal to allow VIE Shops to proceed with the

Terminal 4 retail project left Sardana without a financial partner and unable to close the deal on

his own. Faced with a looming deadline to submit financial guaranties to JFKIAT, Sardana

scrambled to locate a partner with the necessary financial resources. Ultimately, the only com-

pany willing to partner with Sardana was Aer Rianta International plc (“Aer Rianta”), an Irish

company well-known as an operator and originator of duty-free airport shops, but with limited

experience in the specialty retail segment of the market. To secure Aer Rianta’s participation

and financial backing, Sardana was forced to give Aer Rianta a 70% majority stake in a new enti-

ty and relinquish management authority. With Aer Rianta’s partnership, Sardana and Saveria

JFK were awarded the right to operate the Terminal 4 project.

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38. The joint venture with Aer Rianta was a financial disaster; by 2009 it had

lost more than $10 million. In 2009, Sardana was finally able to dissolve the partnership with

Aer Rianta and reacquire 100% of the equity ownership interest of the JFK project. However,

the project’s extended Use and Occupancy permit required a multi-million dollar capital invest-

ment, and Sardana still could not secure conventional financing, because the implementation of

the Master Plan had the intended effect of tarnishing Sardana’s creditworthiness.

VIE Terminates the Joint Venture

39. After VIE’s refusal to consent to the JFK project, which led to Sardana’s

failed partnership with Aer Rianta and caused significant losses at Terminal 4, the Board termi-

nated all leases with the Sardana Group at Vienna Airport as of December 23, 2002, and all con-

tracts including the recently signed MOU.

40. Following VIE’s termination of all agreements with the Sardana Group, a

two-year legal battle ensued. On Dec 23, 2004, VIE forced a settlement on a financially weak-

ened and vulnerable Sardana with no compensation for the Terminal 4 project.

41. During the entire existence of the joint venture with VIE, Sardana was

prevented from exploiting a single business opportunity: VIE refused to give its consent and fi-

nancial backing to one deal.

The “Dirty Laundry Affair” and VIE’s “Master Plan”

42. In mid-2010, several negative press articles based on unfounded facts and

rumors against Sardana were published, and anonymous complaints against “the Indian” were

filed with the Criminal Police of Lower Austria as well as with the Austrian taxing authorities

alleging wrongdoing by Sardana. After an exhaustive and lengthy investigation, Sardana was

exonerated of all charges and the investigations were terminated.

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43. In December 2010, the Austrian press disclosed the existence of a conspir-

acy – commonly referred to as the “Dirty Laundry Affair” – initiated by the Board of VIE in

2004 as part of a secret strategy to destroy Sardana and his businesses. The plot was discovered

when the Criminal Police of Lower Austria raided the offices of Peter Hochegger in connection

with an unrelated matter, and discovered the Master Plan and other documents relating to the

Defendant’s campaign against Sardana.

44. The documents discovered by the police revealed Hochegger’s and VIE’s

direct roles in the “Dirty Laundry Affair”. Hochegger wrote and presented the Master Plan to

the VIE Board. The Master Plan detailed three “situations” or “conflicts” at Vienna Airport that

VIE wanted to address. Sardana was identified as “Initial situation 2 Conflict Level Sardana.”

45. For each “situation” or “conflict,” the Master Plan was divided into two

primary sections. In the first section, the Master Plan identifies the “Conflict level” or problem

that VIE purports to want to address. For Sardana’s case, the Master Plan declares that Sardana

has turned from a highly reliable business partner of many years’ standing into a problem for

VIE as a result of many severe management errors of his own making. It states that key compa-

nies within the Sardana Group have experienced economic turbulence and that his conglomerate

is no longer well-suited to be a serious partner for retail trade at the airport.

46. The “Conflict level” for Sardana that VIE purportedly wanted to address

was a smokescreen to cover VIE’s true intent: to orchestrate a campaign against Sardana that

would cause the ruin of his businesses and, through that, destroy “the Indian”. After laying out

“facts” to support and justify VIE’s intended course of conduct, the Master Plan specifies what

must be done. This is detailed in the section of the Master Plan entitled “Countermeasures Con-

flict Level 2.”

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47. There were two components to the countermeasures. The “overt” coun-

termeasures – those that VIE was prepared to openly acknowledge – were based on the false

premise that an originally good business relationship had, in recent years, gone bad because of

overestimates, capricious interpretations of contracts, and the flouting of agreements on Sarda-

na’s part, which eroded trust. The Defendant’s ostensible goal, according to the Master Plan,

was to correct the one-sided, and, for Sardana, advantageous representation of the conflict situa-

tion and to shore up the way in which VIE acted as unavoidable from the standpoint of a prudent

businessman. VIE would respond to queries about Sardana by stating its opinion “objectively

and in a factually oriented manner and it refers to the ongoing Legal proceedings.”

48. The second group of countermeasures were “covert,” which VIE intended

be kept secret. As alleged earlier, VIE’s goal was the complete economic destruction of Sardana.

The covert actions were detailed in the Master Plan, and included:

• In keeping with the strategy of shifting focus to other conflict hot spots in connection with Sardana and to mount a media blitz, the two case studies, Anker and Heinemann are being prepared and leaked to the media.

• The tenor of the Anker story: Sardana is a deceitful businessman who consciously deceives his business partner for his own benefit. In the process, the high public value of the firms Ankerbrot and Ströck are exploited in the media.

• The tenor of the Heinemann story: All around the Sardana corporate web, a veritable economic scandal threatens province of Lower Austria with consequences for suppliers, banks, and the political sector that are impossible to predict

• A leading daily newspaper, which will push the campaign forward in the form of a serialized story, is to serve as the booster rocket. The campaign is to start as soon as possible – depending upon the disman-tling campaign by Anker.

• Creation of a complete dossier to visualize Sardana’s convoluted cor-porate interweaving and personal business practices. To be able to present the dimensions of the “Sardana case” in a manner that is easily

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visualized, the dossier will, in addition, draw a comparison to similar “blenders.”

• The dossier will be sent to select economic journalists on the day the Heinemann story appears

• On the modus operandi: All communications measures in the course of the campaign are closely coordinated with airport and legal advi-sors.

49. Each of these covert actions was implemented.

The Campaign in New York

50. The Master Plan was not limited to Sardana’s business in Austria. Once

VIE learned about the Terminal 4 project, it became a cornerstone of the campaign to ruin Sar-

dana in New York as well. VIE believed that if Sardana’s business in New York failed, the re-

sult would be his total economic destruction. VIE intended for the dirty campaign to be imple-

mented in New York as a key component of the overall plan.

51. Peter Hochegger was charged with the task of designing the campaign to

destroy Sardana’s New York business. Hochegger’s agency created an extensive dossier under

the title “Dark clouds above Sardana corporate group”. According to Hochegger, the contents of

the dossier were truths, half-truths and lies so entangled that it resulted in a devastatingly bad and

misleading image of Sardana. The “dark clouds” dossier was intended to harm Sardana’s New

York business by damaging his reputation as a respectable businessman and compromising his

creditworthiness.

52. The documentation for the “dark clouds” dossier was provided to Hocheg-

ger by Julian Jäger, who was then a member of the Legal Department of Vienna Airport and who

is now one of Vienna Airport’s COOs. These documents included detailed information on Sar-

dana’s banking relationships, which was especially significant because those records were sub-

ject to the strict banking secrecy laws of Austria and should not have been available to Jäger.

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Hochegger did not independently verify if the information provided by Jäger was true; it was not

important because Hochegger knew the dossier was based on truths, half-truths and lies.

53. The campaign to ruin Sardana in New York had two prongs to be imple-

mented simultaneously. The first entailed delivering the “dark clouds” dossier to people in New

York who would then be able to spread the false and misleading information throughout the me-

dia. The second prong of the plan consisted of one-on-one communications between members of

the Vienna Airport Board and other people in the international airline industry including coun-

terparts at other airports and duty free retailers. VIE and Hochegger believed that these direct

communications, where VIE agents and representatives could talk in depth about Sardana’s

“problems” as outlined in the “dark clouds” dossier and the Master Plan, would be most effective

at causing these parties to not do business with Sardana.

54. To carry out the campaign in New York, the VIE Board entered into a

contract with Gabriel Lansky (“Lansky”), an Austrian attorney with extensive political contacts.

Hochegger and Lansky attended several meetings with VIE Board members Kaufman and

Waniek where they discussed the two-pronged approach outlined above. It was decided that

Lansky would undertake to contact people in New York to whom he would deliver the “dark

clouds” dossier, because it was believed that as VIE’s attorney, Lansky’s communications with

people in New York would be privileged and protected from disclosure.

55. At the behest and instructions of VIE, Lansky contacted persons in his

network in New York City to coordinate and carry out the campaign against Sardana’s U.S.

businesses. Lansky had numerous conversations with two attorneys in New York City beginning

on December 1, 2003 about the campaign against Sardana. Lansky reported these conversations

to Hochegger, and Kaufman and Waniek at VIE.

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56. Lansky also hired private investigators in New York to gather dirt to be

used against Sardana.

57. In April 2011, Hochegger testified to the investigators of the Criminal Po-

lice of Lower Austria that his principal source for confidential dossiers and information on Sar-

dana as well as his “handler” in this project was Julian Jäger, who in 2004 was the manager in

the legal department of VIE and who today is one of the COOs and a member of the manage-

ment Board of VIE.

58. After Sardana learned about the Master Plan and VIE’s campaign to de-

stroy him and his business, Hochegger voluntarily confessed these actions against Sardana at

hearings initiated by the criminal investigation department of the police of Lower Austria, and

revealed various details of the Master Plan and conspiracy in sworn testimony. Hochegger testi-

fied that the campaign against Sardana had been authorized and paid for by the management

Board of VIE and was intended to find damaging material against Sardana. Hochegger also tes-

tified that the investigation included wire-tapping the cell phones of Sardana and his family and

hiring a private detective to spy on Sardana and his family. They called this investigation

“Kleine Nachtmusik” after the Mozart composition, because Sardana was operating some tourist-

shops called “Mostly Mozart”. In the end the VIE shareholders had to pay for this campaign.

59. The criminal investigation department concluded that VIE paid Hochegger

€126,754.19 for his work from November 2003 to March 2004 in addition to €49,616.99 paid to

Lansky.

60. Following his testimony, Hochegger wrote to Sardana to apologize for his

role in developing the Master Plan, and identified Kaufmann and other directors of VIE who

were involved in the decision to go forward with the Master Plan. Hochegger wrote:

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The Directors of the Vienna Airport represented you to me as someone damaging to the Vienna Airport’s image as a result of his troubled economic past and the constant quarrels with the partner Gebrüder Heinemann [the firm of Heinemann Brothers], which is located at the airport.

Due to the efforts of our agency, negative reports appeared in the media, as well as surveillance by a private detective, who was, as I recall, hired by another of the airport’s consulting firms.

Sardana asked Hochegger directly if the campaign to destroy him extended to New York.

Hochegger lied and answered no.

The Aruba, Dublin, Miami and Malta Airport Projects

61. VIE’s campaign against Sardana continued through 2011, causing him ir-

reparable financial damages by destroying his New York-based business, Plaintiff Saveria JFK,

that prevented him from capitalizing on other opportunities at JFK Airport and other domestic

and foreign international airports. In particular, but not solely, Lansky’s efforts in New York to

implement the Master Plan resulted in significant lost business opportunities for Sardana includ-

ing expansion at JFK Airport.

62. As alleged above, the original intention when Sardana agreed to allow VIE

to acquire 51% of VIE Shops was to use that vehicle to develop, own and operate specialty retail

shops at international airports outside of Austria, with Sardana providing the management exper-

tise and VIE providing the financial backing. When VIE inexplicably withdrew from all cooper-

ation and joint venture participation with VIE Shops without having participated in a single pro-

ject, Sardana nevertheless sought to develop opportunities himself in the United States and else-

where utilizing Saveria JFK.

63. In 2003, Aruba International Airport (“Aruba Airport”) issued a request

for proposals (the “Aruba RFP”) to develop retail space at the airport.

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64. In response to the Aruba RFP, Sardana submitted a proposed “retail con-

cept” for Saveria JFK that met all of the technical and other requirements for the project set forth

in the Aruba RFP. The Aruba proposal presented a diverse range of high-end and luxury retail

brands that Aruba Airport did not offer to its passengers. The response highlighted and sought to

capitalize on Saveria JFK’s experience in Terminal 4 as well as Sardana’s long history of owning

and operating specialty retail shops in Vienna.

65. Without explanation, Aruba Airport rejected Sardana’s proposal.

66. In or about March 2005, Miami-Dade County issued a request for pro-

posals (the “Miami RFP”) to develop duty and tax-free concessions at Miami-Dade County In-

ternational Airport (“Miami Airport”).

67. In response to the Miami RFP, Sardana submitted a proposed “retail con-


in the Miami RFP. The response highlighted and sought to capitalize on Saveria JFK’s experi-

ence in Terminal 4 as well as Sardana’s long history of owning and operating specialty retail

shops in Vienna.

68. Without explanation, Miami Airport rejected Sardana’s proposal.

69. In 2008, Dublin Airport Authority (“Dublin Airport”) issued a request for

proposals (the “Dublin RFP”) to develop retail space at the airport as part of an expansion of the

first floor departure area in the airport’s Terminal 1.

70. In response to the Dublin RFP, Sardana submitted a proposed “retail con-


in the Dublin RFP. The response highlighted and sought to capitalize on Saveria JFK’s experi-

ence in Terminal 4 as well as Sardana’s long history of owning and operating specialty retail

shops in Vienna.

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71. Without explanation, Dublin Airport rejected Sardana’s proposal.

72. In the course of attempts to participate in several international airport pri-

vatization projects, in 2001 VIE entered the bidding process for Malta International Airport

(“Malta Airport”). VIE was bidding for the ownership and long-term operations (including retail

shops) of Malta Airport, when the Maltese government was looking for investors and operators

from the private sector.

73. Because of Sardana’s excellent know-how and practical experience oper-

ating shops at Vienna Airport, he was invited by VIE’s Project Manager (Executive Vice Presi-

dent of Finance and Group Shareholdings) to participate actively in this bid.

74. Sardana presented a first-class concept for the operations and development

of the retail shops at Malta Airport, which was included in the bidding documents submitted by

VIE to the Privatization Commission of the Maltese government.

75. VIE succeeded with its bid and was awarded ownership and an operations

contract. The award was to a great extent due to the professional and convincing retail opera-

tions and development concept of Sardana.

76. Sardana had been invited originally to participate in the project with the

understanding that if the contract was awarded to VIE, Sardana would actively participate in the

airport operations responsible for the retail business of MIA as VIE’s partner.

77. However, despite a clear agreement between VIE’s Project Manager and

Sardana, and despite the fact that VIE relied upon and highlighted Sardana’s expertise in its suc-

cessful bid, the VIE Board did not allow Sardana to participate, thus breaching the agreement.

78. Consequently Sardana suffered considerable financial losses as well as

damage to his New York business, Saveria JFK which prevented him from capitalizing on other

international airport privatization projects.

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Sardana Learns About the Master Plan in the U.S.

79. For more than a decade, Sardana’s diligent efforts to develop specialty re-

tail shops – first with his partner VIE and then alone after VIE terminated the partnership – were

frustrated by the implementation of the secret Master Plan and the continuing conspiracy, active

concealment and silence of VIE and its accomplices and co-conspirators.

80. On September 14, 2013, Peter Hochegger finally informed Sardana for the

first time that the campaign to ruin him in Austria was also directed to his business ventures in

New York. In a sworn affidavit, Hochegger stated that in 2003/2004, his company “was as-

signed and awarded the project to undertake dirty campaigning to malign and destroy the repu-

tation of Mr Rakesh Sardana and his New York based subsidiary, Saveria JFK Inc, together with

a leading Vienna based law firm at the behest of Vienna International Airport Plc (VIE AG) by

Mr Herbert Kaufmann (CEO), Mr Gerhard Schmid (COO) and Mr Kurt Waniek (CFO), who

were then the members of Executive Board of Directors and the top management of Vienna In-

ternational Airport plc (VIE). (Emphasis added). Prior to September 14, 2013, Plaintiffs did not

know and could not have learned of the Defendant’s secret scheme in New York.

81. VIE, with the complicity and/or knowledge of Erwin Pröll, Michael

Häupl, Herbert Kauffman, Gerhard Schmid, Johannes Coreth, Christoph Herbst, Julian Jäger and

Erwin Hameseder, had succeeded in destroying “the Indian”.

FIRST CLAIM FOR RELIEF (Fraudulent Concealment)

82. Plaintiffs incorporate each of the foregoing paragraphs as if fully set forth

herein.

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83. Defendant VIE fraudulently represented to Sardana that if he agreed to the

demands for concessions at Vienna Airport, VIE would aid Sardana in his commercial ventures

including at JFK Airport.

84. VIE intended that Sardana would rely on its false and fraudulent represen-

tations.

85. VIE had no intention of aiding Sardana to develop the Terminal 4 shops.

86. Sardana reasonably relied upon VIE’s representations because of the exist-

ing business relationship between the parties as joint venture partners.

87. Sardana’s reliance on VIE and VIE’s unjustified withdrawal from the pro-

ject caused Sardana to partner with Aer Rianta, which was the only acceptable partner that could

step in given the timeframe with JFK Airport. This partnership was economically compelled by

VIE’s actions.

88. Part of the “dark clouds” dossier written by Hochegger’s firm as part of

the Master Plan was designed specifically to cause Aer Rianta to terminate its partnership with

Sardana.

89. The failure of Sardana’s partnership at JFK Airport with Aer Rianta was

the direct and proximate result of VIE’s actions.

90. VIE had a duty to disclose its intention to disavow the Cooperation

Agreement because of its existing relationship with Sardana as a joint venture partner.

91. VIE breached its duty to Sardana.

92. VIE fraudulently concealed from Sardana the existence of the Master Plan

and actions taken in New York in furtherance of the Master Plan.

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93. Prior to September of 2013, VIE, through its agent, Hochegger, affirma-

tively lied to Sardana about the Defendant’s efforts to extend to New York the “dirty and illegal”

campaign that had begun in Austria.

94. Plaintiffs did not know and could not have learned of the Defendant’s se-

cret scheme in New York prior to September 14, 2013.

95. As a result of the foregoing, Plaintiffs have been damaged in an amount to

be proved at trial, but not less than $168,000,000.

SECOND CLAIM FOR RELIEF (Tortious Interference With Prospective Economic Advantage – JFK Airport)


herein.

97. VIE, with the support of past and present members of the VIE Board in-

cluding Kaufmann and Schmid and other Non-Defendant VIE Officers and Directors, malicious-

ly sought to damage Sardana’s business for no cognizable business reason.

98. VIE, with the approval and consent of the Board led by Kaufmann and

Schmid, and with the support of other past and present members of VIE’s Board including Non-

Defendant VIE Officers and Directors, hired Hochegger to develop the Master Plan for the in-

tended purpose of damaging Sardana’s business.

99. VIE, with the approval and consent of the Board led by Kaufmann and

Schmid, and with the support of other past and present members of VIE’s Board including Non-

Defendant VIE Officers and Directors, hired Lansky to help implement the Master Plan in New

York for the intended purpose of damaging Sardana’s business.

100. No valid business reason existed to justify VIE hiring agents and proxies

in New York and Vienna to damage Sardana.

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101. The “Covert” steps detailed in the Master Plan were intended to destroy

Sardana and his businesses, and evidence the Defendant’s intent.

102. Sardana did not learn about Defendant’s efforts to destroy his business in

New York until September 14, 2013.



104. Plaintiffs had an agreement in place with JFKIAT – the Use and Occupan-

cy Permit – that contained a renewal option.

105. To gain the anticipated advantages of this agreement, Sardana turned to

his partner in VIE Shops, Vienna Airport, as required by the Cooperation Agreement.

106. Defendant was fully aware of the agreement with JFKIAT and had the op-

portunity to benefit from that agreement as Sardana’s partner.

107. Rather than consent to the Terminal 4 project and facilitate the develop-

ment of the retail shops, Defendant refused to cooperate, leaving Sardana without a financial

partner.

108. Defendant’s wrongful actions forced Sardana to turn to Aer Rianta as a re-

placement, without which he would have lost the contract at Terminal 4.

109. Sardana’s joint venture with Aer Rianta at JFK lost more than $10 million.

These losses were a direct and proximate result of Defendant VIE’s wrongful conduct.

110. As a result of Defendant VIE’s wrongful conduct, Sardana was unable to

compete for other business opportunities at JFK Airport.

111. The acts undertaken at the direction of VIE and the Non-Defendant VIE

Officers and Directors, and designed and/or implemented by Hochegger and Lansky, were the

direct and proximate cause of Sardana’s losses at JFK Airport.

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THIRD CLAIM FOR RELIEF (Tortious Interference With Prospective Economic Advantage –

Aruba, Miami and Dublin Airports)


herein.

114. Sardana had opportunities to enter into agreements with Aruba, Miami and

Dublin Airports to develop specialty retail shops.

115. Aruba Airport rejected Sardana’s proposal in response to the Aruba RFP

because the people responsible for evaluating the response and awarding the contract read in the

duty-free industry press about Sardana’s disputes with VIE, and as a result believed that Sardana

was deceitful and untrustworthy and a person that they should not do business with. This was

the result intended by VIE when it hired Hochegger and Lansky to develop and implement the

Master Plan.

116. Miami Airport rejected Sardana’s proposal in response to the Miami RFP





Master Plan.

117. Dublin Airport rejected Sardana’s proposal in response to the Dublin RFP




26 {00011195v7 }


Master Plan.

118. Malta Airport approved VIE as the operating partner for the entire airport,

but the VIE management, in breach of its agreement, refused to allow its partner Sardana to par-

ticipate. In his affidavit, Siegfried Gangl stated: “Amongst others, Melbourne and Malta airports

offered perfect opportunities for VIE Shops to expand but it was indicated to me by the man-

agement board of VIE AG that those projects should not be offered to Mr Sardana and his Group

of companies. In the absence of signature operations of VIE Shops at Vienna airport, it was vir-

tually impossible to secure concessions at other international airports.”

119. Defendant VIE’s conduct was undertaken with knowledge, intent and mal-

ice to destroy Sardana’s businesses.

120. VIE knew or should have known, and intended that the actions taken by

Hochegger and Lansky to implement the Master Plan would cause negative and damaging press

about Sardana that would injure his businesses.

121. The acts undertaken at the direction of VIE and the Non-Defendant VIE

Officers and Directors, and implemented through the Master Plan by Hochegger and Lansky,

were the direct and proximate cause of Sardana losing the opportunities to develop the retail

shops at the Aruba, Miami and Dublin Airports.

122. VIE knew that Sardana was developing relationships with the three air-

ports.

123. Sardana only learned about VIE’s efforts to destroy his business in the

United States on September 14, 2013.



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WHEREFORE, Plaintiff demands judgment against Defendant as follows:

(a) Damages in an amount to be proved at trial but not less than $168,000,000, plus interest, costs and reasonable attorneys’ fees; and

(b) Such other and further relief as is necessary and proper.

Dated: New York, New York RICH MICHAELSON MAGALIFF

September 9, 2015 MOSER, LLP Attorneys for Plaintiffs

By: /s/ Howard P. Magaliff HOWARD P. MAGALIFF ROBERT N. MICHAELSON 335 Madison Avenue, 9th Floor New York, NY 10017 646.453.7851 [email protected] [email protected] STACEY RICHMAN Co-Counsel for Plaintiffs Law Offices of Richman Hill & Associates PLLC 2027 Williamsbridge Road Bronx, NY 10461 (718) 892-8588 [email protected]

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county of queens rakesh sardana, : 709438/2015€¦ · business practices, and to fraudulently...

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