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Swissair Trial to Open As Biggest in Swiss History

Switzerland's biggest ever economic crime trial was set to begin in Zurich on Tuesday when a district court prepared to hear evidence against 19 former managers, board members and consultants of failed airline Swissair.

SAirGroup, Swissair's parent company, collapsed in 2001 with debts of around 17 billion Swiss francs ($13.64 billion), following a disastrous acquisition campaign that targeted struggling European rivals.

The hearings will be closely followed in business circles with the rulings expected to shed light on the grey area between poor management and criminality at a time with the public's focus on corporate governance is intensifying.

Former CEOs Mario Corti, Eric Honegger and Philippe Bruggisser are among those charged for their efforts to salvage the group.

State prosecutors have charged 19 individuals with irregularities including defrauding creditors, falsifying documents, breach of trust, and making false statements.

Several of the accused face possible prison sentences if convicted.

Zurich's chief prosecutor Andreas Brunner has said that none of the accused is believed to have been motivated by personal profit.

"These are not actual business criminals or frauds," Brunner said when presenting the charges in March 2006, "but people who primarily wanted to prevent the collapse of the SAirgroup ... sometimes, unfortunately, using dishonest methods."

NATIONAL PRIDE

As well as leading to investment, pensions and job losses, the company's sudden demise came as a major blow to Swiss pride, with Swissair seen as a symbol of national reliability, quality and efficiency.

The Swiss public's fascination in the events leading up to the bankruptcy remains strong -- so much so that a documentary film chronicling Swissair's final days was the most popular domestic movie in the country's cinemas last year.

The trial is being held in a town hall capable of holding up to 1,500 people, as the regular court rooms were too small to cope with the media and public interest.

Many of the actions highlighted by the prosecution involve instances where the accused are alleged to have diminished the worth of the parent company, SAirGroup, in their efforts to keep flagship Swissair flying.

Although prosecutors see that as a violation of the board's duty to the SAirGroup shareholders, defence lawyers are expected to argue that without Swissair, the group would in any case have been doomed.

The trial is being heard by three judges with the hearings scheduled to run until March 9.

The judges will deliberate in private before delivering their verdicts, although that is unlikely to mark the end of the matter.

As well as the possibility of appeals, three separate civil suits have already been filed by Swissair's liquidator.