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Nine people under house arrest or being sought for suspected malfeasance linked to property sector

Italian prosecutors have issued a warrant for the arrest of Austrian property tycoon René Benko amid an investigation into alleged improprieties with his business in the sud-Tyrol region, two law enforcement officials familiar with the matter confirmed.

In total, nine people — including the mayor of a small Italian town, a city manager, three business people and four professionals — have been put under house arrest or are being sought for suspected malfeasance linked to the property sector in the Trentino-Alto Adige region, the Trento prosecutor’s office said on Tuesday.

The arrest warrants mark the latest twist in the insolvency of Benko’s Signa conglomerate, which saddled banks, insurance companies and other investors in Austria and Germany with billions of euros in losses.

Creditors have accused a key entity in the Signa group of engaging in “unlawful transactions” before it filed for insolvency last December. Austria’s anti-corruption prosecutors in April opened an investigation into fraud allegations.

Prosecutors on Tuesday said investigations by Italy’s anti-mafia unit had revealed the apparent existence of “a business group capable of influencing and/or controlling” major public initiatives, “especially in the sector of building speculation” in Trentino-Alto Adige.

“The entrepreneurs involved would make themselves available to finance the electoral campaigns of public administrators, obtaining benefits, simplified procedures and concessions for real estate initiatives,” the prosecutors’ statement said.  

Norbert Wess, a lawyer for Benko, said in an emailed statement that no European arrest warrant would be executed against his client. He also said Austrian authorities “had not imposed any other conditions or obligations on Mr Benko”.

Austria’s postwar constitution forbids the extradition of its citizens to participate in foreign court proceedings. 

“Mr Benko will continue — as before — to co-operate fully with all national and international authorities and is confident that any allegations against him can be clarified as substantively incorrect.” 

Benko was one of Europe’s most flamboyant property developers, whose empire acquired stakes in New York’s Chrysler Building, London’s Selfridges and even the building that houses Austria’s constitutional court in Vienna.

But his flagship holding company, Signa, disintegrated last year under pressure from its billions of euros of debt, and Benko filed for personal insolvency earlier this year. 

Signa projects in the Alto-Adige region included an ambitious mixed-use shopping centre, office and apartment complex in the heart of Bolzano, just a short distance from the town’s historic cathedral.

Benko made the area his second home, buying several luxurious properties around Lake Garda for the use of him and his family through his Liechtenstein-based personal foundation.

In addition to issuing the warrants on Tuesday, authorities also searched more than 100 locations in Trento, Bolzano, Milan, Rome, Brescia and other Italian cities.

In total, the prosecutor’s statement said 77 people were under investigation in the case, including 11 public officials and 20 managers of local public offices and public sector companies, as well as some law enforcement officials and local businesspeople.  

Among the charges being levied against those suspected of involvement in the matter include criminal conspiracy, fraud, bid-rigging, illicit financing of political parties, undue receipt of payments to the detriment of the state, corruption and revelation of official secrets, the prosecutors statement said.  

Members of Yoon Suk Yeol’s own ruling party say they will try to block the move that halts certain political activities

SEOUL—South Korea’s president declared martial law, telling his country in a televised address Tuesday night that opposition parties had made the country vulnerable to North Korean “communist forces.”

Yoon Suk Yeol, a conservative who took office in 2022, accused the opposition party, which controls the country’s National Assembly, of holding the country hostage. He cited the rejection of a budget proposal and impeachment cases against South Korea’s top prosecutors as threats to the country’s constitutional order.

“The martial law is aimed at eradicating pro-North Korean forces and to protect the constitutional order of freedom,” the 63-year-old Yoon said.

Members of Yoon’s own ruling conservative People Power Party said they would seek to block the move—the first declaration of martial law since 1980 when South Korea was under military rule. The opposition Democratic Party, which can request a lifting of martial law, called for an emergency meeting at the National Assembly late Tuesday after Yoon’s address.

The martial law command proclaimed that any political activities by South Korea’s unicameral, 300-seat parliament are banned, as well as nationwide curtailment of rallies and protests. It also calls on all medical personnel to return to work within 48 hours, among other measures.

By law, the National Assembly can lift martial law through a majority vote and requires the president to comply. The opposition Democratic Party enjoys majority control with 170 seats.

But access to the National Assembly building, where a vote could take place, appeared to be limited with the entrance guarded by police, according to local news footage.

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All’s fair in love and a global trade war.

Donald Trump looks set to reignite his tariff war with China when he returns to the White House. But a different and friendlier region will become collateral damage.

Europe may well be faced with its own Trump tariffs but it’s those aimed at Beijing that could be more detrimental for the region. That’s because Europe’s economy depends more on international markets than domestic, and needs seamless global trade–something that would be impacted by levies.

However, some specific stocks and sectors can still do well even if the European economy overall suffers, particularly as the region’s shares are undervalued and due for some amount of catch-up with their U.S. peers. Consumer staples, utilities, and technology are sectors that may be worth a look.

Even before the prospect of tariffs, the outlook for Europe was already darkening – UBS just downgraded its prediction for the Euro STOXX 50 next year. That index has gained about 7% this year, compared with a 19% increase for the Dow Jones Industrial Average. The continent is still coping with higher energy costs than in the U.S., particularly since Russia invaded Ukraine in 2022, as well as its exposure to the slump in China, another of its major trading partners.

On the campaign trail, Trump said he favored across-the-board tariffs, and on Nov. 25, he promised a 25% tariff on imports from Mexico and Canada, along with an additional 10% tariff on goods from China.

Even if he hasn’t spelled it out yet, European companies will probably also have to cope with Trump’s tariffs on exports to the U.S.–things like luxury handbags produced by LVMH’s Louis Vuitton brand, Ferrari cars made in Italy, or Talisker Scotch whiskey shipped by Diageo. About 20% of exports from the European Union and the U.K. go to the U.S.

But levies on European products may not be that damaging overall, according to strategists at UBS. For one thing, most of what Europe exports are services, not goods, which wouldn’t be affected. Second, a lot of what we might think of as European exports, such as Volkswagen or Bayerische Motoren Werke

BMW

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cars, are actually made in the U.S. already, which would also make them exempt from the new levies. And third, Trump’s tariffs would probably drive up the dollar against other currencies, which would lessen the impact of the costs on the revenues of European companies.

The greater threat to Europe is how the tariffs affect Asia and the rest of the world.

“My bigger concern is the knock-on effect on global growth and the impact to end demand,” said Matthew Gilman, a European equity strategist at UBS. “Tariffs can disrupt supply chains, they increase trade frictions, and we are very exposed to what’s going on in global manufacturing.”

Other countries will almost certainly retaliate by adding tariffs of their own. China may also respond by ramping up exports elsewhere. Europe would be in its sights–a flood of Chinese imports, as the continent has already seen with electric vehicles, would increase competition and push down prices.

“Certainly Europe is more sensitive to what’s going on in China,” said Martin Todd, a fund manager at investment manager Federated Hermes. “It’s easy to make quite a bearish case for Europe. The obvious push back to that is valuations for European stocks.”

Todd points out that there are bright spots–European stocks currently trade at about 14 times forward earnings, which is at the low end of their historic range, Todd said. U.S. stocks, by contrast, are trading at more than 22 times earnings, which, compared with an average of 20 over the past five years, is “well above historic levels.”

The outlook isn’t all bad for stocks. If the theme of a new Trump administration becomes self-reliance, then UBS sees several sectors that stand to gain in Europe–consumer staples, utilities, and technology.

For consumer staples, the argument is that even though spirits like Scotch would be affected by tariffs, sales of many goods would be unaffected. For example, European consumers will still have to buy household goods from companies like Unilever, which owns Dove soap and more than 30 other brands. Or there’s Switzerland-based Nestle, which owns Gerber baby foods. The iShares MSCI Europe Consumer Staples ETF (ticker ESIS) is already beaten down, having dropped about 5% since the start of the year, compared with a 5.8% gain for the STOXX Europe 600 index.

Utilities may do well as companies and countries are forced to invest more in the energy transition away from fossil fuels. Examples include France’s EDF or Germany’s E.ON. The risk for this sector is an end to the Russia-Ukaine war that lowers natural gas prices again, which might hurt these stocks.

Europe’s technology companies haven’t had the same spectacular growth as U.S. peers recently, but that could make them interesting. SAP, the German business software company, or semiconductor maker Infineon offer potentially high growth rates, but largely fly under the radar because they don’t have their main listing in the U.S.

Defense companies in Europe could benefit if Trump follows through on threats to reduce military support to allies. Other countries may increase their defense spending as a result and France’s Thales, Germany’s ThyssenKrupp, and the U.K.’s BAE Systems are companies that stand to gain–and all have underperformed the S&P 500 this year.

But with new tariffs in the pipeline that will twist the knife of Europe’s vulnerability to Chinese economic weakness, companies across the pond are bracing for turbulence.