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Confidential documents show how 680 million euros in state aid flowed to Galeria without sufficient security. A possible insolvency of René Benko’s entire Signa Group has apparently not been regulated.
René Benko is said to have possibly moved millions of dollars shortly before his Signa Group went bankrupt. Following these latest reports, investors have filed criminal charges against the Austrian. The legal processing of the Signa bankruptcy is one thing – but what about political responsibility for the billions in damage?
The top priority here is the 680 million euros in Corona aid for the insolvent Galeria Karstadt Kaufhof group; The Economic Stabilization Fund (WSF) had paid this to the department store group, apparently without sufficient security and without reliable research into the financial background of the Signa/Benko empire.
Dem WDR Existing confidential documents show that those responsible at the WSF apparently expected Galeria to go bankrupt again. In this case, their outstanding claims against Galeria Karstadt Kaufhof should be sold to Signa.
Secret contract reveals dramatic gap
On March 27, 2023, a secret so-called put options agreement was concluded between the WSF, Signa and Galeria; Afterwards, in the event of Galeria Karstadt Kaufhof’s insolvency, the parent company Signa was supposed to step into the breach and support the WSF’s claims against Galeria – albeit at a significant discount.
At this point in time, only 88 million euros were secured and this only included inventory, name and trademark rights, among other things. And Signa Holding should only have to pay 27 million euros for this remaining claim. In plain language: The taxpayer would forego over 60 million euros. However, the contract does not contain any provision for the event that Signa Holding itself goes bankrupt. And this case actually occurred at the end of 2023.
A quick look at the annual financial statements of Galeria’s Swiss parent company would have shown those responsible that a third Galeria insolvency was to be expected. Signa Retail Selection AG reported a loss of 1.394 billion euros as of September 30, 2022, with depreciation and impairments totaling 857 million euros.
And why didn’t anyone hold René Benko himself, the billionaire and the main figure of the entire Signa empire, jointly liable? Not only was this omitted; Benko even benefited from state aid from German taxpayers. Through the rents that Galeria had to pay to Signa, millions flowed back into Benko’s empire of a thousand companies, investments and family foundations.
Missing balance sheets should have aroused suspicion
Like a domino effect, all of Signa’s relevant subsidiaries gradually collapsed, and in the end the holding company itself. Nobody in the Ministry of Economics or Finance apparently wanted or could see what shaky feet Benko’s billion-dollar empire actually stood on. The fact that the Signa Group did not present any consolidated balance sheets for years should have raised suspicions.
The alarm bells should have been ringing for those in charge here, because according to their own statements, Signa had billions in sales, had real estate worth billions and was apparently also highly profitable.
The state aid to the ailing Galeria was not only highly risky, but the WSF also ignored applicable EU law. According to this, so-called “companies in difficulty” were only allowed to receive support if they still had half of their equity capital as of December 31, 2019; But that had already been completely burned at Galeria since September 30, 2019.
Best connections to political celebrities
But how could this disaster come about, was it just incompetence or ignorance on the part of those responsible, or had Benko done a good job in the background? For example, by bringing his old confidant Alfred Gusenbauer into position in good time when it came to Corona aid?
The former Austrian Chancellor, for his part, had first-class relationships with Olaf Scholz (SPD), who, as finance minister, was also responsible for state aid in the wake of the corona pandemic. Both have known each other for decades, among other things from the youth organizations of the Socialist International.
While Olaf Scholz became chancellor in Germany, the former Austrian chancellor Gusenbauer hired Benko after he left office. And he worked for him until Signa went bankrupt – also to secure millions in aid for Galeria? At least that is what two invoices suggest, with which Gusenbauer charged Benkos Signa a total of six million euros in two tranches: among other things, for consulting services in connection with the granting of state aid.
“It’s certainly no coincidence that there are always former politicians on Mr. Benko’s payroll or Signa and also get money there,” said Fabio De Masi, who, as a member of the Bundestag, made several inquiries about Benko’s contacts, including Olaf Scholz the federal government provided. In the wake of the mega-bankruptcy, it became increasingly clear what a good network the “real estate gambler” Benko had, and not just in Austria.
Big names for expensive real estate projects
While almost all the political celebrities beyond the Alps favored him, in Germany he specifically contracted influential lobbyists for individual projects. Big names preferred; like the former first Hamburg mayor Ole von Beust (CDU), who was supposed to take care of the billion-dollar Elbtower property.
Many things about the award process were already suspicious to those involved at the time: Benko’s Signa Group was subsequently approved for an 18 percent larger gross floor area without increasing the purchase price. There is no economic advantage from this, the city of Hamburg says succinctly, although as a result of this free concession alone Benkos Signa received around 9,000 square meters more office space than the original planning envisaged.
“Smells like mouser”
“Of course, this smells like cheating that cannot be explained or justified. So, beyond all the usual procedures, a gift has been distributed here for this dubious investor,” said Jörg Hamann, who has long been a member of the Hamburg parliament for the CDU parliamentary group sat. At the time he was chairman of the urban development committee.
In Berlin it was the conversion of the traditional Karstadt building on Herrmannplatz, which was controversial among citizens and politicians – a project that also needed support from lobbyists in the background; This is where the agency of former Foreign Minister Joschka Fischer came onto the scene, which was supposed to make the alternative scene in the Neukölln neighborhood a perfect fit for his previous environment.
The irony of history: many of Benko’s lobbyists and other servants have not yet received their money. Some can be found on the creditor lists, including Germany’s most prominent media lawyer, who was happy to protect Benko from unpleasant reporting – for a mere 38,000 euros a month.