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Corruption suspected: Migros and the great silence

The over-provisional order is indeed off the table – but the Migros persist silently over the Damien Piller case.

Beat Schmid

Migros boss Fabrice Zumbrunnen is silent about the case against his former boss. (Image: Ennio Leanza / Keystone, June 27, 2019, Zurich)

Migros boss Fabrice Zumbrunnen is silent about the case against his former boss. (Image: Ennio Leanza / Keystone, June 27, 2019, Zurich)

For months, Migros headquarters could not comment on the case. A court order prevented the Migros Cooperative Federation (MGB) from providing information about Western Swiss regional prince Damien Piller against whom he had filed a criminal complaint. The headquarters was the barrel removed this week, as confirmed by a Migros spokesman. "Yes, we have been informed as the affected party of the revocation of the provisional order." However, the retail giant continues to remain silent: "In order not to influence the independence of the process and in deference to the presumption of innocence, we will not comment on details until further notice."

Background: In early July, the Zurich General Board filed a lawsuit against Damien Piller on suspicion of unfair business. She accuses the lawyer and businessman of having deducted a total of 1.7 million francs in building two Migros markets presumably in his own pocket. In addition, in mid-July, the management of the Neuchâtel-Freiburg Cooperative Migros filed a lawsuit against its president. This strongly denies the allegations. For him, the presumption of innocence applies.

The case has been dealing with Migros for years. After an employee reported headquarters-specific information, in December 2017 she initiated an internal investigation. In February 2019, criminal law expert and corruption expert Mark Livschitz presented a 50-page investigation report. It reads that the funds flowed to two controlled by Piller companies. These companies are said to have provided "no recognizable benefit to the cooperative." Piller was "obviously in a blatant conflict of interest," he confessed.

Conversion of one million euros

In addition to Piller, other members of the cooperative could have behaved as unfair. The report mentions, among others, Marcelle Junod, then managing director and current member of the administrative council of the French-speaking Swiss regional cooperative. They say they managed to "durchinstruieren" the "alleged incriminated payments" obviously "without obstacles," they say. The causes of the events in Freiburg and Neuchâtel located corruption expert Livschitz, among others, in cultural, incentive and control weaknesses. As a problem, he thinks Piller applied a "revolving door" principle. As a rule, the chief financial officer becomes the head of the company and then moves to the board of directors. Therefore, the above decisions would be judged without criticism.

Spicy: One of Piller's numerous sons and daughters is Fabrice Zumbrunnen, who has been at the head of the MGB since 2017. For him, investigations against his former boss are a big burden. According to one source, investigations could become a problem for drowning. "The Piller case is a threat to the head of the MGB," says the source. "What if sensitive documents signed by Zumbrunnen appear?"

His tenure at the regional cooperative includes the conversion of a large million-euro mall, the Marin Center, in Marin-Epagnier, near Neuchâtel. According to the trade register, Migros's headquarters in Zurich set up a company specifically for conversion, with Zumbrunnen on the board of directors since 2005. In 2007, the share capital was increased by CHF 17 million. The capital increase also places Damien Piller and Marcelle Junod on the board of directors of Marin Center SA. The company's headquarters was moved from Zurich to Marin-Epagnier. The mall opened in 2011. A year later, Zumbrunnen was appointed to the Directorate General in Zurich and resigned from the company's Board of Directors. Junod and Piller serve on the board of directors to this day. In 2016, Migros, Mitreva Treuhand and Revision AG internal auditors were released from their audit mandate. Since then, the company has been subject to limited review. A spokesman says Migros did not let Zumbrunnen's business pass. "There was no reason to do that," he says.

Is the case a danger to Zumbrunnen?

Zumbrunnen has nothing to fear? One thing is certain: the Piller case will put Migros's headquarters to the test. The headquarters has never had to direct such heavy weapons to bring a regional cooperative to Raison. Not a few within the Migros universe wish the ad had never been sent. «There is no culture of debate in Migros. Abuses are not addressed. You avoid conflict and hope that they will be resolved, "says one source.

Needless to say, former Migros president Andrea Broggini allowed months to go before he filed the complaint. And her successor, Ursula Nold, has not yet been visibly taken care of. Internally, it is feared that Neuchâtel-Freiburg is not the only cooperative in which it has reached irregularities. There are no indications for this, but the mere fact that Migros knows no bounds for regional princes fuels suspicion. "Eternal" realms are poisons for good corporate governance. In this professional world you agree.

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