VIENNA, July 4 (AFP): An Austrian court has sentenced the state to pay damages to a minor after he suffered major losses in the financial crisis, a newspaper report said Friday.

The Vienna court ruled that the state's guardianship authority was guilty of allowing half of the assets of the minor to be invested in stock of real estate company Immofinanz whose stock exchange value was practically halved by the financial crisis and possible embezzlement.

The guardianship court had given the green light to the investment of 35,000 euros, arguing that it had acted responsibly in doing so "as a family man would have", Die Presse reported,

Immofinanz whose investments included real estate projects in eastern Europe had promised annuities of about 10 per cent.

The youth's lawyer Harald Christiandl said the ruling "shows that the state violated its controllership."

The state also failed to stop Immofinanz and another failed Austrian company, Meinl European Land (MEL), from making investors believe that they were fail-proof as they were allowed to practise "misleading advertising which minimised the possible risks."

Before the financial crisis Immofinanz and MEL had raised several hundred million euros on financial markets but later collapsed.