Allegations of fraud and professional misconduct have been filed against Reto Wittwer, the Swiss-born former president and chief executive of Kempinski Hotels.
He is alleged to have channelled funds out of the company "with fraudulent intent and avoiding all internal controls", including during periods when Kempinski was attempting to make budget cuts and drastic savings on labour costs.
Alejandro Bernabé, current chief executive of Kempinski, said: "Kempinski, and everyone associated with the company, has been badly let down by someone in whom we placed our full trust. The high responsibilities of executive office and the fundamental values on which Kempinski has carefully built its business have, we believe, been deliberately flouted in the pursuit of personal greed and unlawful gain. We are treating this matter with the utmost seriousness."
Kempinski, which was founded in 1897 in Berlin, announced in October 2014 that Wittwer had retired as president and chief executive after 19 years in the role. However, it has now emerged that Wittwer was asked to leave the company "with immediate effect" after initial suspicions of professional misconduct came to light.
The group said that the decision to take legal action followed a full internal investigation conducted by a third party." As soon as the company became aware of the suspected fraud, Kempinski conducted a thorough review of its internal controls," the company said. "A number of changes in terms of internal audit and compliance have been made.
"Kempinski has entire confidence in the Swiss criminal authorities with whom the complaint has been filed, and will fully support the authorities as the criminal complaint follows its due course."
Following the decision to terminate a management contract with the five-red-AA-star, 105-bedroom Stafford hotel in London by mutual agreement, Kempinski no longer has a presence in the UK. A statement from the Stafford hotel said that the decision to end the agreement, which had been signed in 2010, had been made "in the best interests of all parties".
Since 2004, a majority stake in Kempinski has been owned by the Thailand Crown Property Bureau. Today the company is largely a hotel management business, although it continues to own the Hotel Vier Jahreszeiten in Munich, while holding lease contracts on Hotel Adlon in Berlin, Palais Hansen in Vienna and the Grand Hotel des Bains in St Moritz.
Kempinski currently operates 78 hotels in 33 countries During the last 12 months, Kempinski has opened seven hotels in Myanmar, China, Qatar, Germany, Egypt and Ghana, with a further five expected to open during 2016.