Bankrupt property tycoon René Benko in court over alleged insolvency fraud
Signa group founder goes on trial accused of concealing assets as empire faced collapse under wight of debts
René Benko, the Austrian real estate tycoon who founded the collapsed Signa empire, will return to court this week for the start of a criminal trial linked to his personal insolvency.
Prosecutors have accused Benko of concealing assets and diverting funds worth almost €660,000 to the detriment of creditors in his personal insolvency case. The two-day trial starts on Tuesday in Innsbruck and the entrepreneur, who denies the charges, faces up to 10 years in prison if convicted.
The case forms part of a wider investigation in the failure of Signa, which caught out banks, sovereign wealth funds and family offices that lent more than €15bn to entities in the group, making its implosion one of the most dramatic in European corporate history.
In July, Austrian prosecutors alleged that Benko, who has been in pre-trial detention in Vienna since January, shifted money through questionable transactions in late 2023, including an advance rental payment of €360,000, and a €300,000 gift to relatives as his empire neared collapse.
Prosecutor unveiled new charges last month, accusing him of hiding €120,000 in cash, 11 high-end watches as well as cufflinks, and other items worth almost €250,000 in the home of a relatives to keep them from creditors. The co-defendant is alleged to have contributed to Benko’s crime.
Benko has lodged an objection to the second indictment and this will be heard by the higher regional court, an appeal court known as the Oberlandesgericht. It has not yet been decided whether the newer charges will be included in the October trial.
Prosecutors were able to move quickly on the first case because it has a narrow focus on alleged transfers and concealments in Benko’s personal insolvency, rather than the wider probe of the cross-border collapse of Signa group.
The limited scope will allow for a faster trial while broader and more complex fraud and embezzlement investigations continue in parallel, according to multiple people familiar with the case.
As part of the charges unveiled last month, prosecutors said they had opened new investigations into Benko, including a potential breach of trust relating to Signa’s employee share scheme.
They are looking into whether Signa managers failed to tell employees that their shares were losing value, and whether Benko gave a false guarantee to an investor promising to cover dividend losses in return for a €5mn payment.
Benko’s fall from grace has been among the most spectacular in Europe. He presided over one of the continent’s most ambitious property and retail portfolios, which had German department stores and Alpine developments as well as stakes in the Chrysler Building and Selfridges.
The collapse of his empire has triggered cross-border legal inquiries, with investigations in Austria, Germany and Italy into suspected aggravated fraud, embezzlement, money-laundering and misrepresentation of assets.
The scandal also embroiled Julius Baer, one of Switzerland’s biggest banks, which has faced scrutiny over its exposure to Signa.