Property magnate René Benko arrested in Austria

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Austrian property tycoon René Benko has been arrested as criminal prosecutors in Vienna accuse him of making inaccurate statements during the insolvency proceedings of his Signa property in an attempt to embezzle assets.

Law enforcement authorities said bench he was arrested Thursday because he was considered a flight risk and prosecutors were concerned he might tamper with evidence. They also accuse him of forging a document.

In an unrelated investigation, Italian police in December issued an arrest warrant for Benko for alleged improprieties with his business in the South Tyrol region. Viennese criminal prosecutors disclosed on Thursday that they have formed a joint investigation team with prosecutors in Berlin and Munich to speed up cross-border investigations.

Benko’s arrest comes more than a year after his conglomerate Signa collapsed, leaving insurance companies, banks and other investors in Austria and Germany facing billions of euros in losses.

Prosecutors say Benko was the last owner of an Innsbruck family foundation named after his daughter Laura. The Financial Times last year reported that a company of the Signa Group transferred more than 300 million euros to two entities controlled by that foundation before the insolvency.

Austrian prosecutors say Benko failed to disclose his control of the entity, called the Laura Foundation, during his personal insolvency proceedings.

“By doing this, he hid the assets and excluded the wealth that was kept in the foundation from law enforcement authorities, the administrator and creditors,” the prosecutors said. a statementpoint to evidence gathered in a multi-month investigation that included telephone surveillance.

Benko is also accused of fabricating evidence by retrospectively producing an invoice to keep three valuable guns out of the reach of authorities, according to prosecutors.

Prosecutors also allege that Benko deceived Signa’s shareholders to participate in a capital increase, pretending that his family foundation would also put in new funds, adding that he masked payments from outside investors such as their contributions, establishing a complex chain of money transfers between different legal entities.

Benko is also accused of selling Villa Eden Gardone, a luxury mansion on Italy’s Lake Garda, to a foundation based in Liechtenstein in a sham transaction that prosecutors see as potential embezzlement.

He is also accused of defrauding a foreign sovereign wealth fund that he persuaded to invest in a property project near Munich’s central railway station. Most of the funds were used illegally for other purposes, prosecutors added.

A lawyer for Benko did not immediately respond to an FT request for comment.