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Apr 14, 2016
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Family behind defunct German retail chain Schlecker to face trial

By
Reuters
Published
Apr 14, 2016

German prosecutors said on Thursday they would press criminal charges against the family behind drugstore chain Schlecker, which folded four years ago.

The chain's founder, 71-year-old Anton Schlecker, is accused of having siphoned assets from the company on 36 occasions while in full knowledge of its looming bankruptcy, according to the prosecutors' office in the city of Stuttgart.


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It did not provide a figure on the sums involved, but a spokesman for the prosecutors said several million euros had been illegally diverted from funds available to repay creditors.

Under German law, removing assets in face of a company's imminent bankruptcy is punishable by imprisonment of six months to up to 10 years in severe cases.

Schlecker's wife and two children are accused of having helped Schlecker in several instances.

The Stuttgart prosecutors also said Schlecker, a former billionaire, falsified company results in 2009 and 2010, accusing him and two auditors of services firm EY (Ernst & Young) of approving the rigged results.

EY declined to comment on the allegations on Thursday. Lawyers for the Schlecker family had no immediate comment.

Unlisted Schlecker filed for insolvency in January 2012, hit by competition from rivals Rossmann and dm and after failing to secure funding to upgrade its stores. All 2,800 stores later that year closed, leaving around 13,200 employees out of work.

German newspapers Stuttgarter Zeitung and Stuttgarter Nachrichten reported the Schlecker family were being charged with having siphoned about 20 million euros ($23 million) away from the drugstore chain and out of creditors' reach before it went insolvent.

The economic chamber of the Stuttgart court now has to decide on whether to open the trial, a procedure that can take several weeks.

$1 = 0.8870 euros
 

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