Italian prosecutors issue arrest warrant for Signa’s René Benko

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Italian prosecutors have issued a warrant for the arrest of Austrian property tycoon René Benko amid an investigation into alleged improprieties with his business in the sud-Tyrol region, two law enforcement officials familiar with the matter confirmed.

In total, nine people — including the mayor of a small Italian town, a city manager, three business people and four professionals — have been put under house arrest or are being sought for suspected malfeasance linked to the property sector in the Trentino-Alto Adige region, the Trento prosecutor’s office said on Tuesday.

The arrest warrants mark the latest twist in the insolvency of Benko’s Signa conglomerate, which saddled banks, insurance companies and other investors in Austria and Germany with billions of euros in losses.

Creditors have accused a key entity in the Signa group of engaging in “unlawful transactions” before it filed for insolvency last December. Austria’s anti-corruption prosecutors in April opened an investigation into fraud allegations.

Prosecutors on Tuesday said investigations by Italy’s anti-mafia unit had revealed the apparent existence of “a business group capable of influencing and/or controlling” major public initiatives, “especially in the sector of building speculation” in Trentino-Alto Adige.

“The entrepreneurs involved would make themselves available to finance the electoral campaigns of public administrators, obtaining benefits, simplified procedures and concessions for real estate initiatives,” the prosecutors’ statement said.  

Norbert Wess, a lawyer for Benko, said in an emailed statement that no European arrest warrant would be executed against his client. He also said Austrian authorities “had not imposed any other conditions or obligations on Mr Benko”.

Austria’s postwar constitution forbids the extradition of its citizens to participate in foreign court proceedings. 

“Mr Benko will continue — as before — to co-operate fully with all national and international authorities and is confident that any allegations against him can be clarified as substantively incorrect.” 

Benko was one of Europe’s most flamboyant property developers, whose empire acquired stakes in New York’s Chrysler Building, London’s Selfridges and even the building that houses Austria’s constitutional court in Vienna.

But his flagship holding company, Signa, disintegrated last year under pressure from its billions of euros of debt, and Benko filed for personal insolvency earlier this year. 

Signa projects in the Alto-Adige region included an ambitious mixed-use shopping centre, office and apartment complex in the heart of Bolzano, just a short distance from the town’s historic cathedral.

Benko made the area his second home, buying several luxurious properties around Lake Garda for the use of him and his family through his Liechtenstein-based personal foundation.

In addition to issuing the warrants on Tuesday, authorities also searched more than 100 locations in Trento, Bolzano, Milan, Rome, Brescia and other Italian cities.

In total, the prosecutor’s statement said 77 people were under investigation in the case, including 11 public officials and 20 managers of local public offices and public sector companies, as well as some law enforcement officials and local businesspeople.  

Among the charges being levied against those suspected of involvement in the matter include criminal conspiracy, fraud, bid-rigging, illicit financing of political parties, undue receipt of payments to the detriment of the state, corruption and revelation of official secrets, the prosecutors statement said.  

Additional reporting by Giuliana Ricozzi in Rome and Silvia Sciorilli Borrelli in Milan