Real estate tycoon René Benko at rock bottom
Published: Thursday, Mar 7th 2024, 17:11
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Following the series of insolvencies at the Signa Group, the founder of the real estate and retail group has now also declared himself insolvent. René Benko has filed for insolvency at the Innsbruck district court, a court spokeswoman confirmed to the German Press Agency on Thursday.
A judge is expected to rule on the 46-year-old entrepreneur's application in the coming days, she added. The "Kronen Zeitung" had previously reported on this.
Without a high school diploma to self-made billionaire: this was the short version of the real estate and trading tycoon's rise to fame until Benko lost his billionaire status at the beginning of December. Born in Innsbruck in 1977, Benko began renovating attics as a teenager.
He left business school without a degree and entered the real estate business. In 2004, the then 26-year-old made headlines with the purchase of an Innsbruck department store, which was subsequently redesigned as a shopping center by British star architect David Chipperfield.
Rise with prominent investors
Benko managed to get financially strong supporters on board - such as logistics entrepreneur Klaus-Michael Kühne, management consultant Roland Berger and Torsten Toeller, the founder of Fressnapf pet stores. "It's quite simple. Investors are interested in getting a decent return on their money," said former Austrian Chancellor Alfred Gusenbauer, who has held advisory and supervisory functions for Signa.
"The investors have always made good money," Gusenbauer told the ORF broadcaster. Benko wanted to develop much more than real estate. "Signa should be a family-owned European industrial and investment holding company. Similar to the family holdings of the Agnellis, Oetkers or Reimanns," he told the Austrian magazine "Trend" in 2018.
The Italian car manufacturer family Agnelli (Stellantis), the Oetkers with their food and beverage companies and the Reimann beverage dynasty (Jacobs) are not only active in their core businesses, but in several sectors. Like the Agnellis, Benko also focused on media, and like the Oetkers, he also focused on hotels.
Benko also invested in the Galeria Karstadt Kaufhof department store group and in online retailing of sporting goods. Today, the Galeria Group is insolvent again, as is the sports division. Benko's prestigious investments also include the Elbtower project in Hamburg, the luxury department store KaDeWe in Berlin and the Chrysler Building in New York. In Switzerland, Signa is co-owner of the Globus department store group.
Rising interest rates as a problem
The Signa crisis was triggered by interest rates, energy prices and construction costs, which rose sharply in the wake of the war in Ukraine. However, there were already signs of problems earlier. "I left Signa as a shareholder in 2016 because the figures that were presented to me did not match what Benko told us in meetings," former Porsche CEO Wendelin Wiedeking told Handelsblatt.
In addition, there was a lack of transparency in the barely transparent Signa company network with hundreds of sub-companies. Until a few months ago, Benko was considered one of the richest Austrians. According to the US magazine "Forbes", Benko's value peaked at 6 billion dollars in 2023. However, at the beginning of December, Forbes removed him from its international billionaires list in light of Signa's growing problems.
Where has Benko's fortune gone?
Benko has now filed for insolvency as an entrepreneur. In contrast to private insolvency, he can therefore undergo restructuring proceedings in the same way as a company. The Republic of Austria had previously filed an insolvency petition against him at the Innsbruck Regional Court. Among other things, it concerned an unpaid subsidy that Benko had announced for the insolvent holding company of the Signa Group.
"I think this is actually the most exciting insolvency in the entire Signa complex," said Gerhard Weinhofer from the credit agency Creditreform in Vienna. "Where is the money? Why is it illiquid?" said the expert about the events.
The media have recently written several times about money transfers in which Benko's private foundations played a role. Benko has not yet commented publicly on the financial claims against him or on the Signa crisis. He would have the opportunity to do so at the beginning of April. He has been summoned to a parliamentary committee of inquiry, which is investigating the possible preferential treatment of politically well-connected major entrepreneurs by the authorities.
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