Reuters US Business
By Francois Murphy and Alexandra Schwarz-Goerlich
INNSBRUCK, Austria (Reuters) -Austrian former billionaire Rene Benko went on trial on Tuesday in the first case connected to the collapse of his property group Signa, which at its peak acquired stakes in New York's Chrysler Building and British department-store chain Selfridges.
Signa became the biggest casualty of Europe's property downturn when some of its main units filed for insolvency in 2023. Prosecutors are conducting a sprawling investigation into possible crimes committed, and estimate the related damage caused at around 300 million euros ($348 million).
Benko, wearing a dark suit and red tie in his first public appearance since he was arrested in January, pleaded not guilty to two charges of insolvency-related fraud. The 48-year-old told the court he did "not currently" have an income but declined to comment on his assets.
He later declined to be questioned by the presiding judge, and before lunch the trial was adjourned until Wednesday, when witnesses are due to testify and a verdict is expected.
BENKO FACES UP TO 10 YEARS IN PRISON
Tuesday's trial is the first of two cases prosecutors have filed against Benko so far, dealing with a tiny fraction of the total estimated damages. In both, he is accused of diverting money or valuables to keep them out of creditors' hands.
The charges he faces this week alone carry a sentence of up to 10 years in prison.
This week's trial centres on whether roughly 660,000 euros in payments and transfers were attempts by Benko to keep that money out of creditors' hands or reduce their compensation.
Just over half that amount, roughly 360,000 euros, was rent and related up-front expense payments made in 2023 for a house in Innsbruck that was uninhabitable and in need of repairs, the Central Prosecutors' Office for Economic Crimes and Corruption (WKStA) said, arguing that such payments made no economic sense.
Benko's lawyer Norbert Wess, however, argued that such an arrangement was perfectly normal and permissible, and that Benko later moved into the house with his family sooner than the prosecution contended.
DISPUTED RENT PAYMENTS AT TRIAL CENTER
The remaining 300,000 euros were ostensibly a gift to his mother, the WKStA said, arguing that it was what Benko had left over from a larger sum paid out by a family trust.
"It is absurd to accuse Mr Benko of having deprived his creditors of their assets," Wess told the court. Benko later said his lawyer had shown the accusations to be "false".
Signa's collapse is Austria's biggest bankruptcy since World War Two and a spectacular fall from grace for Benko, who built Signa from the ground up, expanding into Germany, Switzerland and beyond on the back of low interest rates, until the surge in inflation and then rates after Russia invaded Ukraine.
Signa's creditors, which include blue-chip companies Deutsche Bank, Allianz, Julius Baer and Raiffeisen Bank International, have filed billions of euros in claims against the group since its collapse.
($1 = 0.8626 euros)
(Reporting by Francois Murphy; Editing by William Maclean and Louise Heavens)
Local News in New York
AlterNet
KTAR News 92.3
Raw Story
Associated Press US News
Associated Press Elections
Cover Media
CBS News