Read also: ‘Homeless Billionaire’ Nicolas Berggruen Finally Lets Go Of Failing Karstadt Department Store
The German department store chain Karstadt is going to be sold to real estate shark Rene Benko, who was recently brought up on corruption charges. In August, right before the Karstadt deal closed, Benko was convicted of corruption charges with a 12 month suspended sentence. In 2009, he was tried to manipulate tax findings in Italy and tried to manipulate Italian government officials.
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Benko, who is just 37 years old, along with his Signa real estate company, will take possession of 83 stores with employ 17, 000 people. More interested in real estate than retail, he plans to close a large number of stores and convert the remainder into shopping malls, which will command high rents. The current owner, Nicolas Berggruen, has instituted wage cuts and layoffs, declared that the sale would be a success. Many workers fear that the union is in cohoots with Benko, and don’t count on a fair shake when the ink dries on the deal.
