What: KaDeWe faces criminal investigation for alleged subsidy fraud, adding to the legal challenges surrounding former owner Signa Group, whose founder René Benko is under investigation in multiple countries.

Why it is important: This development underscores the complex aftermath of Signa's bankruptcy, as authorities across multiple countries examine potential misconduct while new owners attempt to stabilise these iconic retail institutions.

The Berlin prosecutor's office has initiated an investigation into subsidy fraud at KaDeWe, extending its earlier probe into Signa Group and its 169 subsidiary companies. The investigation, which began last summer, is examining potential criminal activities including breach of trust and subsidy fraud. This development comes after significant changes in KaDeWe's ownership structure, with Thailand's Central Group acquiring the department store this spring. The investigation adds to mounting legal challenges facing Signa's founder René Benko, who is already under investigation in Austria and Italy, with Italian authorities issuing a European arrest warrant related to real estate speculation charges. The case highlights the ongoing fallout from Signa's collapse and its impact on major European retail assets.

IADS Notes:Following KaDeWe's insolvency filing in early 2024 and subsequent acquisition by Thailand's Central Group, this investigation by Berlin prosecutors represents another layer of complexity in the unraveling of Signa Group's former retail empire.

KaDeWe suspected of fraud