René Benko, once a leading property tycoon whose empire included stakes in New York’s Chrysler Building, Selfridges in London, and major German department stores, has been accused by Austrian prosecutors of embezzling tens of millions of euros before his Signa Group collapsed in 2023.
Benko, who built Signa on €5 billion of debt, was arrested last month and remains in pre-trial detention in Austria. Prosecutors in Vienna, Munich, and Berlin are conducting criminal investigations, while Italian authorities have also issued an arrest warrant over alleged suspicious payments to local officials.
Embezzlement Allegations
According to a 38-page arrest warrant obtained by the Financial Times, Austrian prosecutors claim Benko:
- Deceived business partners into injecting €35 million into Signa while simultaneously moving assets out of creditors' reach.
- Shifted valuable furniture worth €8 million, a €90,000 Patek Philippe watch, and expensive hunting rifles to conceal them from creditors.
- Engaged in a questionable sale of the Villa Eden Gardone estate in Italy, swapping the €46 million property for shares in a Signa subsidiary, which became worthless after insolvency.
- Orchestrated payments of €15.5 million between 2018 and 2023 to individuals close to him, including a €2 million payment in 2023.
Prosecutors claim that many of these transactions were "artificial and economically implausible," designed to protect assets from creditors rather than genuine business deals.
Suspicious Real Estate Transactions
A key accusation involves the sale of Villa Eden Gardone, originally owned by Signa Holding and sold in August 2023 for €46 million to a foundation officially controlled by Benko’s mother, Ingeborg. However, prosecutors allege:
- Instead of cash, the transaction was settled with worthless shares from a struggling Signa subsidiary that collapsed three months later.
- The deal lacked standard sale documentation, raising concerns that it was a sham transaction designed to remove assets from Signa’s books.
- Benko allegedly controlled the foundation despite it being registered under his mother’s name, making the deal even more suspect.
Deception of Investors
At the same time as shifting assets, Benko allegedly misled investors about his financial situation. In 2023, when his personal investment vehicle was nearly insolvent, Benko falsely claimed he would invest €35 million in a €350 million capital increase for Signa Holding.
Instead, prosecutors say:
- He redirected investments from business partners through multiple legal entities, disguising them as his own contribution.
- This deception helped secure additional funding, even as Signa was on the verge of collapse.
Ongoing Investigations in Germany and Italy
The criminal investigation extends beyond Austria, with prosecutors in Berlin and Munich also probing Benko's financial dealings. Italian authorities are investigating suspicious payments made to officials, potentially linked to Benko’s real estate acquisitions in the country.
Austrian prosecutors have suggested that Benko may have used his vast business network to conduct fraudulent activities on an international scale.
Benko remains in detention, facing multiple fraud, embezzlement, and bankruptcy charges. His legal team has not commented publicly on the allegations.
Signa’s collapse was one of the biggest corporate failures in Austria’s history, and authorities continue to unravel the full extent of its financial mismanagement.
Meanwhile, investigators in Germany and Italy are expected to expand their probes, meaning further charges could be filed against Benko in the coming months.
