Fraud at kika/Leiner: Former Chief Executive in Custody, Damages €16 Million
A former chief executive of the insolvent furniture chain kika/Leiner is being held in custody. Approximately 4,700 customers are believed to have been harmed.
Former kika/Leiner Chief Arrested on Suspicion of Fraud
A former chief executive of the insolvent furniture chain kika/Leiner was arrested on Friday — the following Sunday, the court imposed custody. The Economic and Corruption Prosecutor's Office (WKStA) confirmed this on Tuesday to the APA, according to ORF. The alleged total damages amount to approximately €16.1 million.
"The accused stands under strong suspicion of deliberately exploiting the plight of flood victims in September 2024," the WKStA stated. As part of a "weather emergency relief campaign" advertised on social media, customers were allegedly promised a 20 per cent discount on furniture purchases — with the aim of rapidly generating advance payments.
This campaign is believed to have been part of a systematic fraud scheme. According to the WKStA, the retail company was actually insolvent from late January 2024 onwards. Nevertheless, the accused is said to have continued to accept advance payments for furniture purchases and distributed value vouchers, even though delivery was impossible due to lack of liquidity.
According to the prosecutor's office, at least 4,700 customers made advance payments and received no goods. The resulting damage is estimated at approximately €15 million. Initially, the St. Pölten prosecutor's office investigated the case before transferring it to the WKStA, according to the "Kurier".
Furthermore, the WKStA suspects that the accused deliberately concealed assets of the furniture chain shortly before insolvency proceedings began, in order to thwart or reduce the satisfaction of creditors in the insolvency proceedings at the St. Pölten Regional Court. He is said to have released payments for invoices without adequate consideration and thereby withdrawn a total of €1.1 million. These funds are believed to have flowed to a cooperating company as well as to a company owned by the accused.
In the background stands the Signa Group of René Benko, who is also currently in custody: Signa sold the kika/Leiner real estate in 2023 to Graz-based property developer Supernova and divested the operational furniture business. Shortly thereafter, the first insolvency petition followed.
According to the prosecutor's office, the imposition of custody signals that the court shares the WKStA's legal position and also assumes strong suspicion of a criminal offence. Flight risk, obstruction of justice, and risk of reoffending are cited as further grounds for custody. The accused denies the allegations, according to the "Kurier". The presumption of innocence applies.
Source: ORF