Top manager at Signa dismissed without notice due to suspicion of Economiesuisse expects moderate economic development

Ailing real estate and trading group Signa has fired the CEO of its main sub-companies: Timo Herzberg, head of Signa Prime Selection AG and Signa Development Selection AG.

The Signa Group, founded by billionaire René Benko, announced in Vienna on Monday evening that Herzberg had been relieved of his duties with immediate effect and terminated without notice and without notice.

The reason for the dismissal was an urgent suspicion of gross neglect of duty as a board member. The renovator Erhard Grossnig will take on the role of board spokesperson in both real estate companies that are to be renovated and restructured. Several companies from the Signa group had recently filed for bankruptcy.

The most important properties and construction projects in the Signa portfolio belong to Signa Prime – including the currently halted Elbtower construction project in Hamburg, the KaDeWe in Berlin and department stores of the Galeria Karstadt Kaufhof chain.

Signa also has a stake in the Globus department stores in Switzerland. The co-owner of Globus, the Swiss Signa Retail Selection AG, had the provisional moratorium approved last Wednesday.

Signa Prime recorded a loss of around one billion euros last year and had around 10.8 billion euros in debt at the end of 2022. Signa Development recorded a loss of 316 million euros.

During the low interest rate phase of recent years, Benko was able to take out cheap loans and attract financially strong investors to significantly expand its group. Recent increases in interest rates, construction costs and energy prices have put his complex network of businesses in dire straits. (sda/dpa)