Signa bankruptcy: René Benko in custody

Austrian real estate entrepreneur René Benko was arrested almost a week ago in his villa in Innsbruck and transferred to Vienna. The public prosecutor's office for economic affairs and corruption in Vienna cited the risk of a possible conspiracy to commit a crime and the risk of a possible premeditation. A court had to decide on an application for pre-trial detention within 48 hours - and granted it. According to the Austrian media, the real estate entrepreneur will now remain in police custody for at least two weeks.

Phone calls tapped

Numerous proceedings are underway in several countries against Benko, whose billion-euro Signa Holding slipped into insolvency last year. One of the central allegations against Benko is that he is the de facto ruler and beneficial owner of the Laura Private Foundation and concealed this in the context of his personal insolvency. In doing so, he concealed assets and withdrew the foundation's money from access by the authorities, trustees and creditors. The public prosecutor's office came to this conclusion after intercepting telephone calls and monitoring Benko's e-mail correspondence.

Third-party capital issued as own

According to the public prosecutor's office, Benko allegedly induced shareholders of Signa Holding to make further investments in the company as part of a capital increase by announcing that he would inject his own money. In doing so, however, he is said to have passed off other people's money as his own contribution by transferring it across several companies - keyword "money carousel". The Signa founder is also alleged to have sold a Luxembourg investment company, including the associated villa on Lake Garda - the infamous "Villa Eden Gardone" - to another Liechtenstein foundation, but without any appropriate consideration.

Prior to Benko's arrest, the economic and corruption prosecutor's office in Vienna had announced new house searches at several locations - "on the basis of new findings from previous investigations", as it said. Benko is now accused of investment fraud in the realization of the Franz project at Munich Central Station. He allegedly induced managers of a foreign state fund to invest in the real estate project by means of bonds. In fact, the bond proceeds were not fully invested in the agreed project, but a large part of the money was used for the wrong purpose. Benko is also being investigated for fraud and misuse of subsidies, particularly in connection with Austrian Covid support measures. Benko is alleged to have channeled such funds into the operation of a chalet in Lech (Tyrol). Above all, however, the criminal proceedings relate to the fact that Benko is alleged to have faked the Signa Group's economic capacity and its willingness to pay when extending a bank loan.

Prosecution witnesses questioned in Switzerland

Benko also did business in Switzerland. Together with partners, he was particularly active in the Globus department store chain - both in operations and real estate - and found investors in this country. Ernst Tanner, the long-standing CEO and Chairman of the Board of Lindt & Sprüngli, joined Benko's Signa empire at an early stage. Benko also found business partners in several Swiss banks to finance his investments. According to the Viennese tabloid "Krone", hearings on the Benko case were recently held in Switzerland. Two witnesses for the prosecution, two Swiss co-investors of Signa, were heard in Frauenfeld, the newspaper writes. Names were not given. (aw)