By Tony Paterson in Berlin
Key staff at the Ikea furniture chain are alleged to have pocketed bribes worth millions of pounds, including luxury furnishings, in a scandal stretching back 20 years.
Gifts of sofas, marble floors and hand-finished kitchens – none requiring self assembly from a flatpack – were said to have been installed in the homes of German executives of the company by building companies anxious to secure contracts. Ikea has admitted that seven former staff are being questioned by German prosecutors over a trail of kickbacks to managers, accountants and project directors.
In addition to furniture, the executives were reportedly given sailing and skiing holidays, and cash gifts totalling millions of pounds, transferred secretly to Swiss bank accounts.
One executive was arrested by Frankfurt prosecutors last year, but committed suicide in prison before he could be tried.
The scale of the apparent corruption has emerged after a year-long investigation of former Ikea executives and of 44 construction company managers. The payments and presents are alleged to have been dispensed to ensure that construction companies remained on an exclusive list of contractors employed to build Ikea’s German empire. The company’s 38 German megastores are the most profitable in Europe.
A spokesman for Ikea Germany said that the seven people being investigated had since left the company. He said: “The sums involved amounted to millions. We have since stepped up our internal controls.”
The alleged bribes came to light last year, when the ex-lover of a senior executive employed by Ikea Property – the division that controls store building and development – blew the whistle.
In a letter to Frankfurt prosecutors, the woman, whose identity has been kept secret, wrote: “I have been employed by Ikea’s building department for 21 years, and for years I have noticed certain irregularities. I think that the company is suffering great damage to its reputation as a result.” She claimed that neither the department’s accountants, nor any of its executives, were in a position to call a halt because many of them were involved.
She provided details of gifts which contractors are alleged to have distributed routinely to Ikea staff, including annual sailing holidays in the Baltic.
Renovation work worth €320,000 (£216,000) was carried out at one manager’s home and at his wife’s physiotherapy practice. “We even paid for his hand-finished kitchen, stereo, television and sofa,” one building company executive told lawyers.
The chief culprit in the Ikea scandal, an executive named only as “Manfred B”, was arrested last year and warned by his lawyers that he faced a minimum penalty of four years in prison if he was convicted of corruption.
Soon afterwards, he hanged himself with sheets tied to the bars of his cell. His identity remains secret under German law.
“Manfred B” received at least €2.8 million (£1.9 million) in bribes from companies attempting to win contracts to develop Ikea stores in three German cities.
“He turned down offers of free holidays,” said the owner of one company. “He was only interested in cash. But he made an exception with his Porsche.”
During Ikea’s own internal inquiry, Werner Weber, the then head of Ikea Germany, said he had been unaware of any irregularities involving Ikea Property. He has since been promoted to deputy director of Ikea’s European division at the parent company, based in Sweden.
