Supreme court sentences the „bogus constructs” of myWorld/Lyoness/Lyconet!

With its national and international company names Lyoness/Lyconet/myWorld has always been playing the shell game with courts and victims. Despite massive resistance, the Viennese Lawyer Dr. Josef Fromhold has managed to realise a judgement of the Austrian supreme court that ends the game of hide and seek.

With the resolution 4 Ob 69/19d of 28 May 2019 the Austrian supreme court in Vienna has confirmed an important judgement and rejected the recourse filed by Lyoness. For the first time the bogus constructs used by Lyoness have now been recognised as such.

Lyoness Europe AG with its head quarter in Switzerland have used a sophisticated firm construction in order to sabotage the enforcement of the injured parties’ rights. With a back and forth of international and national lack of competence, the snowball system Lyoness so far had juggled quite cleverly:

Lyoness Europe AG was the contractual partner of all European members. Only members from Switzerland did not – as it would seem obvious – have Lyoness Europe AG with its headquarters in Switzerland as their contract partner. Contractual partner of Swiss members was the subsidiary, Lyoness Management GmbH, with its headquarters in Austria.

Paradoxically, on the one hand, the international purchasing group for all European members is operated by Lyoness Europe AG with its head quarter in Switzerland, and on the other hand – but only for members in Switzerland – it is operated by Lyoness Management GmbH with its headquarters in Austria. Therefore, members in Austria and Switzerland did not have a contractual partner with headquarters in their own country. There is no factual justification for this. Lyoness Europe AG is only used as a front since it has not yet carried out any business activity in Switzerland at all and only has an accommodation address there. The whole business is operated out of Austria. All companies of Lyoness responsible for organisational matters are located in Austria. The operational business is controlled out of Graz, where also the legal department of the company is located. Actions of development, distribution and promotion are operated out of Austria, this has also been stated by the Austrian Public Prosecutors Office for Corruption within the proceedings against Lyoness Europe AG.

As a point of contact, the member did have a company with the same name (Lyoness Austria GmbH, Lyoness Deutschland GmbH etc.), but he/she unconsciously contracted with a company from abroad. Lyoness AG therefore falsely purported to be a national contract partner.

Until recently, the national companies were subsidiaries of Lyoness Europe AG. But from the moment the first suits against the swiss company were filed in Austria on the ground that the Austrian national company was a subsidiary of Lyoness Europe AG, Lyoness Austria GmbH was renamed mWA my World Austria GmbH.

Also, the shares in Lyoness Austria GmbH were transferred to myWorld International Limited with headquarters in London, that had been founded only shortly before. The share capital of this company amounts to laughable 100 pounds and the company itself does not have any revenues.

Lyoness now alleged that they did not have anything to do with Lyoness Austria GmbH anymore.

This allegation is clearly disproved: Hubert Freidl was accounted for “person with significant control” (at least 75% of the shares, at least 75% of the voting rights and the right to nominate and dismiss the majority of the companies’ officers).

Since this also had become clear, myWorld Holdings Limited was presented as “person with significant control” on 21 January 2018.

But myWorld Holdings Limited with the same address, 3^rd Floor 40 Bank Street London E14 5NR and a share capital of 100 pounds is a property of Freidl: The shareholders are Hubert Freidl with 90% and Marko Sedovnik with 10%. Hubert Freidl is again accounted for “person with significant control”.

The courts have sussed this game of hide and seek and on 21 August 2018, the regional court of Graz has decided that Lyoness Austria GmbH untypically had not only acted for itself but mainly for the parent company Lyoness Europe AG and had been under surveillance and control of it (AZ 257 C 841/17y). Lyoness Europe AG gave the impression that their subsidiary was under their full surveillance and that they were taking part in the national legal communication via their subsidiary, which was also named as their service company in the Terms and Conditions.

Contracts with national members had been processed via the subsidiary. Lyoness Europe AG at least conveyed the impression that its subsidiary is authorised to act and operate under their name. The plaintiff has the right to make legal transactions with Lyoness Europe AG exclusively via their subsidiary as their competent national company which also has a domestic bank account that is quoted in its commercial documents. The exact legal construction and the relationship between Lyoness Europe AG and its subsidiary were not completely transparent to the plaintiff, therefore it does not harm to know about the fact that Lyoness Europe AG has its head quarter in Switzerland

Lyoness Europe AG filed in a recourse to the Austrian supreme court and was rebuffed.

On 28 May 2019 the Austrian supreme court unmasked the bogus construct and stated that the change of names of Lyoness Austria GmbH and the sale of company shares are irrelevant. Lyoness Austria GmbH is a subsidiary of Lyoness Europe AG and therefore it is responsible for suits against Lyoness Europe AG.

The circumstances unmasked within the proceedings indicate a permanent establishment of the subsidiary as the centre of business activities of Lyoness Europe AG in Austria.

The consequence is that all European victims don’t have to file a suit[IB1]  in Switzerland anymore, but they can do it in their home country either at their place of residence or at the place of the headquarters of the national company.

There is now also the possibility for victims from all over Europe to file a suit against Lyoness Europe AG with the court in Austria, where their actual headquarters are. The address in Buchs, Switzerland which was declared to be the place of Lyoness Europe AG’s headquarters, is only a fake residence. In Austria, there have already been hundreds of judgements that have forced Lyoness to make repayments. This is for several reasons and mainly due to the operation of an unlawful snowball system.

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