Luxembourg-linked property tycoon René Benko arrested

Austrian property tycoon René Benko, who had strong ties to several companies registered in Luxembourg, has been arrested, the economic and corruption prosecutor’s office in Vienna has said.

The 47-year-old businessman is accused of having concealed his own assets in connection with the bankruptcy of his corporate empire, the office (WkStA) said in a statement on Thursday. In addition, he is said to have withheld assets held in a foundation from the authorities, insolvency administrators and creditors.

Benko is also being investigated in Germany. The WKStA recently formed a joint investigation team with the public prosecutors’ offices in Berlin and Munich. This makes it possible to conduct cross-border investigations in the complex of proceedings in a less bureaucratic and more efficient manner, it said.

The Austrian entrepreneur built up a large portfolio with his Signa Group, which also included the German department store groups KaDeWe and Galeria. The complex corporate structure collapsed as interest rates, energy prices and construction costs rose. The total claims against Benko amount to around €2.4 billion, according to the insolvency administrator.

The Austrian is also being investigated for alleged fraud in connection with state subsidies paid as Covid-19 relief. This concerns aid money for the luxurious “Chalet N” in the ski resort of Lech am Arlberg. The investigation is into whether the pandemic funds were used as economic support during the pandemic or misused for other purposes.

It was already known that Benko was also under investigation for alleged credit fraud and an alleged bribery attempt. The ex-billionaire is also suspected of having illegally stashed away parts of his assets. Benko’s lawyer has also denied these allegations.

In December, Italian prosecutors issued an arrest warrant for the property tycoon and other people related to his Signa conglomerate.

Signa Holding had several subsidiaries in Luxembourg prior to its application for insolvency in November 2023. Searches were carried out in Luxembourg in July last year following a request for assistance from authorities in Austria. They were said to be related to allegations against Benko surrounding the transfer of assets, including six luxury villas on Lake Garda.

Benko had strong ties to at least five companies registered in Luxembourg that held assets worth €93 million.

(This article was originally published by the Luxemburger Wort. Translation, editing and additional reporting by John Monaghan)