Austrian authorities have arrested Rene Benko, founder of the insolvent Signa property and retail empire, as part of investigations into suspected fraud. 

Anti-corruption prosecutors ordered the arrest due to the alleged risk of attempts to obstruct justice, the agency, WKStA, said in an emailed statement.

Norbert Wess, a lawyer for Benko, confirmed the arrest warrant and said a court must decide within 48 hours whether to order pre-trial detention.  

Benko, 47, has been under investigation for suspected embezzlement, fraud and fraudulent bankruptcy following the financial meltdown of his conglomerate in 2023. The tycoon’s business dealings have come under scrutiny in several other European nations, including Italy, Liechtenstein and Germany. 

At its height, Benko’s group included trophy assets such as the Chrysler Building in New York, a stake in the UK department store Selfridges, and the luxury Hotel Bauer in Venice. The conglomerate filed for insolvency at the end of 2023 amid a financing crunch related to falling property valuations and rising interest rates.

Austrian prosecutors alleged Benko sought to obstruct justice by concealing his role as a beneficiary and de facto manager of a private foundation, and falsifying invoices to withhold assets. 

Prosecutors said the arrest was related to several strands of investigation:
 

• Benko is suspected of persuading shareholders of Signa Holding to increase capital investments with the promise of making his own contributions via a family trust. Prosecutors allege Benko moved other shareholders’ money through several companies, and ultimately used them as his own contribution.
• The businessman and other, unidentified people are suspected of fraud for selling a villa on Lake Garda in northern Italy owned by Signa Holding to a private trust in Liechtenstein without adequate consideration.
• Benko is suspected of fraudulent insolvency for transferring personal assets, including luxury watches and weapons, to the Laura private foundation to the detriment of creditors in his personal insolvency.
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The business model of Benko, who has denied wrongdoing, relied on a network of former politicians as advisers, and Signa’s insolvency and the ensuing investigations reached the highest echelons of Austrian society. 

Alfred Gusenbauer, a former Socialist chancellor, was the supervisory board chair of Signa’s two main real estate units, while Conservative ex-Chancellor Sebastian Kurz helped secure new funding months before the company’s demise. Both have agreed to pay back part of their remuneration.

Signa’s shareholders included some of the richest entrepreneurs in Europe, including transportation tycoon Klaus-Michael Kuehne and the Peugeot family. Prominent investors included the Saudi Public Investment Fund and a broad range of German insurers.

Austrian prosecutors said on Thursday they’ve opened a new line of inquiry into suspicions Benko persuaded a sovereign wealth fund to invest in a project in Munich. The money was then used, in part, to finance other purposes, they allege.