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Signa investors reach out to Rene Benko personally

Signa investors reach out to Rene Benko personally

Things are getting worse for Cigna President Rene Benco. After the multi-billion dollar company went bankrupt, there are now supposed to be consequences for the bankrupt himself: investors have officially filed a criminal complaint with the Public Prosecutor's Office for Economics and Corruption (WKStA).

The basics in a nutshell

  • Signa's investors filed a lawsuit with the Austrian Public Prosecutor's Office for economic crimes and corruption.

  • This includes an asset flow of more than €662 million from Signa Development to (indirect) shareholders and sister companies.

  • Creditors fear a “total loss” of the invested assets.

A group of national and international investors who granted long-term loans to Signa Group are now embarking on a confrontational path and accusing Signa Development of conducting “illegal transactions” in a lawsuit. According to the Financial Times, there is a need for an urgent investigation into the collapsed real estate group.

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Creditors suspect 'illegal transactions'

At the end of November 2023, Signa Holding GmbH filed for bankruptcy, which includes several commercial properties in Germany and Austria as well as the department store group Galeria Karstadt Kaufhof. Shortly after, Signa Development, one of the three main holding companies of the Signa Group and also one of the largest companies within the Signa family of companies, also declared bankruptcy. Which angered investors. They suspect “illegal transactions” – in the run-up to the bankruptcy filing. They have now filed a complaint with the Austrian Public Prosecutor's Office for economic crimes and corruption.

In total, the statement of claim is 22 pages long and full of sensational content: The creditors state that they “identified a significant flow of assets in excess of €662 million from Signa Development to (indirect) shareholders and sister companies for which there is neither economic nor ‘operational justification’.” Signa Development was a “chip” of the conglomerate. It was not only responsible for the development of profitable properties and their quick sale, but also brought a large sum of money into the treasury.

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There are fears of complete loss of investments

The investors' lawsuit cites a “deliberate” lack of transparency on the part of Signa Development in the run-up to the bankruptcy. “No key information was disclosed” to financiers – and now a “total loss” of invested assets is expected. WKStA has not yet decided whether a criminal investigation will be formally opened. However, they are currently studying it. Justify claims.

Erhard Grossnig, a member of the board of directors of Signa Development who is involved in the company's self-management – and therefore its restructuring – is said to have declined to comment on investors' suspicions of criminal activity. However, Andrea Frostorfer, Signa Development's outside director, was persuaded to make a statement: the transactions had taken place, but not immediately before the bankruptcy, and if they had, they would have been “used for Signa's real estate projects.” According to the German News Agency (DPA), it assumes that the bankrupt company will continue – despite recording claims totaling 470 million euros so far.