Business News Industry People Legal

Former Bertelsmann chief jailed for misconduct at retail and travel firm

By | Published on Monday 17 November 2014

Thomas Middelhoff

A former boss of BMG owner Bertelsmann was last week sentenced to three years in jail relating to allegations he misused funds belonging to German retail and travel group Arcandor, which he led from 2005 until its collapse in 2009.

According to the Financial Times, Thomas Middelhoff was accused of breach of trust over 800,000 euros in expenses paid by Arcandor. The costs mainly related to private jet flights the CEO took from Germany to London and New York, and helicopter trips from Middelhoff’s home to the company’s HQ in Essen, none of which, prosecutors argued, should have been charged to the flagging business.

Middlehoff denied the allegations saying he joined Arcandor in a bid to save the company and the jobs of the people working for its various subsidiaries, but the judge hearing the case said the former exec had given “fanciful explanations” for his conduct during the trial.

Prior to the collapse of Arcandor, Middelhoff was best known for his twelve years with German media and entertainment giant Bertelsmann, which included four years as CEO before his departure in 2002. It was during his tenure at the top that Bertelsmann attempted its controversial and ultimately unsuccessful move to help the original Napster company go legit as it faced crippling litigation from the rest of the music industry.