Real estate – Lawyer for the Republic suspects Benko’s assets are in foundations

In the case of failed investor René Benko, the Austrian Financial Procuratorate still sees many unanswered questions. The extreme lack of transparency of the Signa empire founded by Benko with more than 1,130 companies requires a reconstruction of asset transfers and money flows, said the head of the financial prosecution and top lawyer of the republic, Wolfgang Peschorn, to the dpa. “We need the big picture.” In Austria, the Finanzprokuratur is an office subordinate to the Ministry of Finance.

A significant part of the money that was invested in the real estate companies Signa Prime and Signa Development by previously unknown investors flowed through companies in Luxembourg. “It cannot currently be ruled out that this is money that was fed back into the Signa system from the Signa conglomerate via several stations, or that it comes from money laundering,” said Peschorn.

Large sums could also have been parked in Benko’s private foundations. The judiciary and creditors have not yet had access to these assets. Benko’s influence on all Signa companies suggests that his assets are held in trust by the foundations, says Peschorn. “This is a door that needs to be opened.”

Almost two years ago, the Signa empire, which specialized in real estate (Elbtower) and retail (Galeria Karstadt Kaufhof), collapsed with the insolvency of Signa Holding. Creditors are demanding several billion euros.

Benko was once celebrated as a star by politics and society in Austria. At its peak, his assets are said to have amounted to almost 5 billion euros. He has been in custody since January.

A first trial against the 48-year-old at the Innsbruck regional court on October 14th and 15th revolves around the suspicion of having hidden assets from his creditors. According to the judiciary, the damage amount is 660,000 euros.

This process is important for “hygiene reasons,” says Peschorn. “Everyone is equal before the law.” The penalty in this case is up to ten years in prison. The trial in Innsbruck is a small excerpt of the allegations. Overall, the public prosecutor’s offices in Austria, but also in Germany and Italy, are pursuing many lines of investigation, mostly around suspicions of serious fraud and breach of trust.

The case reminded him of the crash of the German payment service provider Wirecard, said Peschorn. In both cases, the experts and investors could have been deceived for years by perfect external representation. “It was all far more appearance than reality,” says Peschorn. Both Benko and former Wirecard boss Markus Braun deny the allegations.

At least at Signa, according to Peschorn, it is a “multi-organ failure” of many who had responsibility or were supposed to control the company. Banks and investors were not critical enough or approved of the business model. “Today it must be clear to everyone that Signa’s business model was by no means sustainable and was similar to a pyramid scheme,” said Peschorn.