INNSBRUCK: An Austrian court has sentenced former property billionaire Rene Benko to two years in prison for insolvency-related fraud in his first criminal trial connected to his real estate group Signa’s collapse.
The conviction relates to Benko’s attempt to keep 300,000 euros from creditors during Signa’s financial difficulties.
Prosecutors estimate total damages from various suspected crimes linked to Signa’s failure at 300 million euros.
This week’s trial specifically addressed approximately 660,000 euros transferred in late 2023 when Signa was already experiencing financial distress.
Prosecutors alleged Benko deliberately diverted these funds to prevent creditors from accessing them during his insolvency proceedings.
Benko pleaded not guilty to both counts against him, with his lawyer Norbert Wess describing the charges as absurd.
Approximately 360,000 euros involved various advance rent and other payments for a house in Innsbruck that prosecutors argued made no economic sense.
The court ruled that the remaining 300,000 euros, ostensibly a gift to Benko’s mother, was sufficient grounds for conviction despite defence arguments that the money was soon transferred back.
Judge Andrea Wegscheider stated that the unconditional nature of the payment to Benko’s mother constituted enough evidence for insolvency-related fraud.
The judge confirmed that the nine months Benko has spent in custody since his January arrest will count toward his two-year sentence.
Benko was acquitted on the second count involving the Innsbruck house due to insufficient certainty about the property’s condition when the lease was signed.
Signa’s bankruptcy represents Austria’s largest since World War Two, affecting investors across Europe including prominent German and Swiss companies.
Benko built Signa from scratch, expanding internationally during periods of low interest rates before the company struggled following rate increases after Russia’s 2022 invasion of Ukraine.
At his peak, Benko maintained an extravagant lifestyle featuring private jets and hunting trips while Signa acquired prestigious assets like New York’s Chrysler Building.
Many of Signa’s luxury properties, including a Lake Garda villa and opulent Vienna palace offices, have been seized or sold with contents auctioned.
Prosecutors have brought at least one additional case against Benko alleging insolvency-related fraud involving cash, luxury watches, and cufflinks found in a safe.
Signa’s creditors, including Deutsche Bank, Allianz, Julius Baer, and Raiffeisen Bank International, are seeking to recover approximately 27.6 billion euros.
Benko’s lawyer described him as a fighter who disagrees with the verdict but didn’t confirm whether they would appeal by Monday’s deadline.
The case has sparked political debate in Austria about business-political connections, given Benko’s relationships with current and former politicians.
Austrian Vice Chancellor Andreas Babler stated on social media that Benko’s case demonstrates what happens when the super-rich make rules instead of politicians. – Reuters
