Real estate mogul René Benko was arrested in Austria Thursday on suspicion of attempting to hide assets and tampering with evidence while under investigation for fraud.
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Benko, the founder of Signa Holding, once held a 50% stake in New York City's iconic Chrysler Building and a 40% stake in the UK's Selfridges department stores before filing for insolvency in 2023.
Austria’s Economic and Corruption Prosecutor’s Office — known by the abbreviation WKStA for its German name — began investigating Benko that same year and now accuses him of concealing personal assets linked to his former Signa real estate empire.
Benko was arrested in Innsbruck, Austria. Authorities are deliberating whether he should remain in custody, Reuters reported.
Austrian officials claim Benko was covertly controlling and acting as the beneficiary of a trust named after his daughter. Via the trust, Benko allegedly concealed assets like expensive weapons, watches and other items, or sold them without sufficient compensation, in an attempt to bypass creditors, Reuters reported.
“He thus concealed assets and kept assets in the trust beyond the reach of the authorities, administrators and creditors,” the WKStA said in a statement.
47-year-old Benko is also under investigation in Germany, and WKStA recently formed a joint investigation team with prosecutors in Berlin and Munich.
That investigation is looking into Benko allegedly leaning on managers of a foreign sovereign wealth fund to invest in “Project Franz” in Munich via bonds and using the funds for other purposes, according to Reuters.
Benko's lawyer, Norbet Wess at WKK Law, did not respond to Bisnow’s request for comment.
When Signa filed for insolvency, he cited difficulties stemming from high interest rates, underperforming assets and overwhelming debt. What was once a $30B real estate portfolio became an estimated $20B debt burden, The New York Times reported in late 2024.
The company acquired its stake in the Chrysler Building in 2019 for $150M in partnership with New York-based RFR Holding, a steal compared to its previous $800M price tag.
But the companies were burdened by a ground lease agreement with Cooper Union, which owns the land beneath the skyscraper. Annual lease payments, set at $7.75M in 2018 — just before the acquisition — were escalating and expected to rise to $41M by 2028.
The situation worsened when Cooper Union announced it would terminate the lease, taking control of the building due to unpaid rent and complicating the financial relationship between the real estate partners, the NYT reported.
RFR Holding had hoped to pick up Signa’s 50% stake for $1 and assume the building's debt, but that deal was scuppered when Signa filed for insolvency.
