Austrian court convicts fallen property tycoon Benko of aggravated fraud

Austrian Tycoon Rene Benko Sentenced for Aggravated Fraud Amid Signa Collapse

Rene Benko's Legal Troubles and the Fall of Signa

By Francois Murphy

Conviction and Sentencing

INNSBRUCK, Austria, Nov 5 (Reuters) - An Austrian court convicted fallen property tycoon Rene Benko on Thursday of aggravated fraud and sentenced him to a further two years in prison, just three weeks after he was released to house arrest to serve out a previous conviction.

Background of Legal Cases

The trial in Benko's home city of Innsbruck was the third case brought against the 49-year-old since his arrest in January last year. All are linked to an ongoing investigation into possible crimes connected to the collapse of the Signa property group he founded.

Previous Acquittals

Benko was acquitted on Thursday of insolvency-related fraud, the offence for which he was convicted in the previous trials.

The Rise and Collapse of Signa

Signa's Assets and Influence

At its peak, Signa owned or held stakes in luxury properties including five-star hotels in Venice and Vienna and New York's Chrysler Building, as well as high-end department store chains such as Britain's Selfridges and Switzerland's Globus. Benko became a self-made billionaire.

Impact of Bankruptcy

Signa's collapse, which began with insolvency filings in late 2023, is the biggest bankruptcy in Austria's history. It inflicted heavy losses on investors, including wealthy individuals and blue-chip companies in neighbouring Germany and Switzerland.

Details of the Latest Trial

The €5 Million Guarantee

This week's trial centred on a notarised guarantee worth about €5 million ($5.6 million) that Benko gave to Austrian industrialist Hans Peter Haselsteiner's family trust in November 2023. The guarantee was linked to an investment in Signa that Benko needed to keep sporting goods retailer SportScheck afloat.

SportScheck Insolvency

SportScheck filed for insolvency within a month.

Judge's Remarks

Providing the guarantee was patently false and "the dumbest thing you could do", presiding Judge Norbert Hofer said as he explained the verdict, while acknowledging that Benko had been working tirelessly at the time to save his life's work.

Additional Information

($1 = 0.8880 euros)

(Reporting by Francois Murphy; Editing by Alex Richardson and Mark Potter)