Benko’s lifestyle was his downfall

The arrest that has now been made U-Haft is just another point in the chronology of the crash. What happens next is up to the judiciary. Due to the complexity, a long-term process is to be expected if an indictment is brought. Questions and answers about the Benko case.

Why was Benko arrested now of all times?

The economic and corruption public prosecutor’s office has ordered Benko’s arrest because of the risk of collusion and the risk of committing a crime. The background is a long list of criminally relevant allegations against the former star investor. A central point that is closely related to his continued lavish lifestyle is that Benko is said to be the actual beneficial owner of the Laura Private Foundation and to have concealed this as part of his insolvency as a sole proprietor. There he presented himself as penniless and dependent on his mother’s support. Then reports and provocative photos appeared, such as the one from the hunt with the Tyrolean ex-SPÖ leader Georg Dornauer.

Why is it important how much money Benko still has available?

If it can be proven that Benko actually has control over the foundation, access to the assets located there could also be possible. That’s why the public prosecutor’s office says that Benko is said to have concealed assets and deceived authorities, trustees and creditors. According to the WKStA, this results from the results of the “intensive investigations of the past few months, in particular telephone monitoring, an evaluation of the accused’s message traffic and statements from business partners, management and employees”.

What assets are parked in the foundations?

It is unclear which assets are in private foundations close to Benko and how much they are worth. An internal list that was made public on Saturday via the Tiroler Tageszeitung provides an insight. It lists the assets of the central Laura private foundation in November 2023, shortly before the collapse of the Signa Group. At that time it consisted of, among other things, an extensive real estate portfolio, including apartment buildings in Innsbruck and Germany and the Chalet N in Vorarlberg. There are also investments and also a private jet and a Ferrari collection. The total market value of the foundation, which is one of several foundations close to Benko, was one billion euros.

What is the main accusation against Benko?

Benko is said to have deceived investors and creditors and is being investigated in Munich for possible money laundering. The presumption of innocence applies. On Thursday, the day of Benko’s arrest, the WKStA named the following procedural strands: capital increase through money carousel, Villa Eden Gardone (Lake Garda) and the bankruptcy of René Benko. The WKStA has also formed a Joint Investigation Team (JIT) with the public prosecutors in Berlin and Munich in the case. The investigation has now been expanded to include suspected investment fraud in the Franz project on Bahnhofsplatz in Munich.

Will Benko be released on bail?

This is not to be expected, because bail is only legally possible in the event of an arrest due to the risk of absconding – but not in the case of a risk of committing a crime or concealment. In principle, pre-trial detention is initially imposed for a period of 14 days.

How should things continue now?

The pre-trial detention is initially legally effective until February 7th. What happens next is unclear. In any case, the investigations against Benko have not yet been completed. On the day of his arrest there were further house searches in Vienna, Tyrol and Vorarlberg. The confiscated evidence – documents, assets and data carriers – is evaluated.

What is the status of Benko’s bankruptcy proceedings?

The bankruptcy proceedings against Benko as an entrepreneur were opened in March 2024. The court recognized claims totaling 47 million euros, with creditors asserting two billion euros in claims. The bankruptcy process is likely to take “many years,” observers say.

What’s taking so long?

In such a complex procedure, lengthy processes through all instances are not uncommon. Wolfgang Peschorn, President of the Financial Procuratorate and thus the Republic’s lawyer, is of course of the opinion that some parts could be separated out and brought to trial relatively quickly. He cited the example of the capital increase in which Signa investors were said to have been deceived.