Real estate and retail investor René Benko is being investigated for loan fraud in his home country of Austria. The Economic and Corruption Public Prosecutor’s Office (WKStA) announced on Tuesday that investigations were underway against the founder of the insolvent Signa Group, another person and a Signa company. It is about suspicion of fraud “due to alleged pretense of solvency when extending bank loans,” it said. According to a report, it is about a 25 million loan from an Austrian bank, which Benko is said to have deceived the institute about the financial situation of the Signa Group when it was extended last summer.
Benko’s lawyer Norbert Wess rejected the allegations. They are “baseless and have no basis,” he wrote in a statement. Attorney Johannes Zink had previously reported to the radio station Ö1 that his law firm had filed corresponding complaints. There is a suspicion that funds were borrowed from banks and investors when the Signa Group was already insolvent. Benko was directly involved. The lawyer did not name his clients.
The lawyer for the bank concerned, Johannes Zink, told ORF Radio that Benko himself acted as the de facto managing director and conducted the financing discussions for the Signa Group. To the daily newspaper Crown newspaper said the lawyer: “I can only confirm that our law firm has filed several criminal complaints for various victims in the Signa case. This involves fraud, breach of trust and fraudulent Krida.”
It was previously known that the WKStA was investigating whether the 46-year-old former billionaire Benko had tried to bribe a high-ranking Austrian tax official. In Germany, the Munich public prosecutor’s office confirmed investigations into suspected money laundering in connection with the Signa Group. Benko’s lawyers also rejected these allegations.
The Signa Group had benefited from low interest rates for years and invested, among other things, in Hamburg’s Elbtower, the luxury department store KaDeWe and the Galeria Karstadt Kaufhof department store group. As interest rates, construction costs and energy prices rose, Benko’s intricate company structure collapsed.
The bankruptcy of Benko’s Signa Group is the largest in Austrian economic history. Several investigations are already underway into the collapse of the conglomerate. In March, the WKStA announced that it was investigating a managing director of a Signa project company for serious fraud relating to a capital raising measure. The suspicion is that investments from investors were not invested in the promised projects. The amount of damage is still under investigation. According to the authorities, numerous reports relating to the Signa Group had previously been received.