He Bought Into Selfridges. Then He Went to Prison.

Transcript

No income at the moment. That’s what René Benko, a former billionaire, tells the court. He pleads not guilty and says he has no income right now, but won’t discuss his assets. This is how the man who bought into Selfridges and the Chrysler Building ended up in prison. How did his empire go bust so fast? Which two payments cost him 30 months behind bars? And who was left holding the losses?

On that first day in court, René Benko would not take questions from the presiding judge. The court sat in Innsbruck, Austria, his home city. He is now held in that city’s prison. Innsbruck is also where his story begins. He was born there in 1977, the son of a local government employee and a nursery schoolteacher. At 17, he got his first taste of the property business, at a building company owned by an acquaintance.

At the end of 1999, aged 22, he set up a company with just two people. He called it Immofina. The early work was up under the roofs: attics, turned into luxury apartments. Another early deal was a health hotel, the Lanserhof in Lans, Austria, bought and sold again at a profit. It was a modest start, but it worked. So how does a firm that small find serious money?

The answer was Karl Kovarik, a Viennese entrepreneur who had inherited several petrol stations. He put 25 million euros into the young company, its first big financial push. Kovarik came on board in 2001, the same year the firm opened its first office in Vienna. He would not be the last rich backer to bet on Benko.

In 2006, Immofina took a new name: Signa. Its focus was prime buildings in the very centre of cities, held for the long term. It bought the Kaufhaus Tyrol shopping centre and had it completely renovated, to plans by the renowned architect David Chipperfield. In Vienna, it bought the former headquarters of two banks, Länderbank and Bank Austria. The old bank building became the Park Hyatt Vienna hotel. Signa would grow into Austria’s largest privately owned property company. But Austria was only the start.

Even the new headquarters of the German stock exchange, near Frankfurt, joined Signa’s portfolio. Then Signa went after Germany’s department stores. Karstadt was one of the country’s major chains. At the end of December 2012, Signa bought the buildings of 17 Karstadt stores. Among them was KaDeWe, Berlin’s well-known luxury department store. Thirteen years earlier, Benko’s firm was converting attics.

The price was more than 1.1 billion euros. That comes to about 65 million euros a building, on average. It was by far the biggest retail property deal in Germany that year. The buyer was a Signa company called Signa Prime Selection. It would come to hold the group’s most exclusive buildings. Remember that name. For now, Signa owned the walls, not the shops inside them. That would soon change.

The governor of Tyrol, his home region, named him Tyrolean of the Year. Austria’s business magazine Trend made him its Man of the Year. He was seen as a model entrepreneur.

In June 2013, at 36, Benko stepped back from running Signa day to day. He became chairman of its advisory board instead.

In June 2019, Signa confirmed a new investor: the French holding company that manages the Peugeot family’s investments. It had bought a slice of Signa Prime Selection, the arm that held the group’s finest buildings. The slice was 5 percent. The price was 186 million euros.

Scale that up to the whole company, and Signa Prime was being valued at about 3.7 billion euros. The Peugeots were not the first big name to buy in. Six years earlier, Hans Peter Haselsteiner, the boss of Strabag, had taken a stake through his family’s private foundation. In 2017, that foundation put in more, when Signa Prime raised 1 billion euros in new capital. Niki Lauda’s family office, already an investor, put in more too, along with new investors. That one round of fundraising brought in nearly as much as the whole 17-store Karstadt deal had cost. Years later, prosecutors would accuse Benko of defrauding Haselsteiner’s family foundation, a charge he denies.

Remember, Signa had started with only the walls of those Karstadt stores. In 2014, it bought the shops as well, taking over the Karstadt chain itself. Four years later, Benko’s Signa went after Germany’s other major department store chain, Galeria Kaufhof. It bought the majority from Canada’s Hudson’s Bay Company and merged Kaufhof with Karstadt. The combined group was expected to be the third-biggest of its kind in Europe. The following June, Signa bought out Hudson’s Bay and had the merged chain, Galeria Karstadt Kaufhof, all to itself. For Hudson’s Bay, it meant leaving the European market altogether.

In 2018, the German business publication Handelsblatt named Benko its Strategist of the Year. The headline hailed his flair for money and business, and his department store coup. The piece was written by Roland Berger. Benko was now counted among the richest people in Austria. At one point, Signa’s property was valued at more than 14 billion euros. In November 2023, Signa would file for insolvency.

Before any of that, Benko made his first major investment in the United States. In March 2019, together with RFR Holding, Signa bought the Chrysler Building, the famed Art Deco skyscraper in New York. The estimated price was 150 million dollars. Benko’s empire now reached across the Atlantic. Three months later came the Peugeot deal.

In 2020, Signa bought a hotel on the Grand Canal in Venice, Italy: the Hotel Bauer Palazzo. That February, in an interview, Benko put Signa’s total assets at 25 billion euros. That is a thousand times the money Karl Kovarik had put in to get the company going. And the biggest trophy was still to come.

Then came Selfridges. On Christmas Eve 2021, the deal was announced. The buyer was a joint venture of Signa and Thailand’s Central Group, each holding half. It was taking the majority of Selfridges Group for around 4 billion pounds. The sellers were the Weston family, who had put Selfridges up for auction that summer. The chain’s flagship on London’s Oxford Street is the second-largest shop in the UK, after only Harrods. From Selfridges in London to the Chrysler Building in New York, the trophies kept coming, but what were all those buildings actually earning?

The Wall Street Journal answered that question, at least for Signa’s offices, in a report written a few months after the group went bust. Appraisers, the paper reported, had valued Signa’s office properties at 41 times the income they produced in 2021, the year of the Selfridges deal. Put that in years. At that valuation, the offices were worth 41 years of their income. That was nearly as long as Benko himself had been alive. Was that normal?

Not by the market’s yardstick. The same report cited Green Street, a real estate advisory firm. Comparable office companies on the stock market, it said, had their properties valued at around 20 to 25 times income. On that measure, Signa’s offices would have been worth only about half to three fifths as much. At that multiple, Signa’s offices were valued far higher than comparable listed portfolios. Remember that gap.

So who was steering all of this? Start with who owned it. Benko’s group, Signa Holding, spanned several hundred companies, tangled together across property, media and retail. Signa Holding’s biggest owner was not Benko himself. It was the Benko family’s private foundation, with 85 percent of the shares. The rest was split between Ernst Tanner of Lindt & Sprüngli and Torsten Töller of Fressnapf. Some of Benko’s own assets were held by a private foundation as well, one called Laura.

Running it was another matter. Signa Holding was managed by its chief executives, Christoph Stadlhuber and Marcus Mühlberger. Formally, group strategy and fundraising were the job of an executive board of division heads and the finance chief. Then there was the advisory board, the one Benko chaired. Under company law, it had no official function at all. Yet it was seen as the body that set Signa’s strategic course. He had stepped back, but he had not stepped away.

The board included well-known names. One member was Alfred Gusenbauer, a former chancellor of Austria, who said he was friends with Benko. Another was Susanne Riess-Hahn, a former vice chancellor. Benko’s ties to Austrian politics ran wide, and his board showed it.

Austrian prosecutors are now running a sprawling investigation into possible crimes around Signa’s collapse. Yet the first trial, the one you saw at the start, covered only a tiny fraction of the damage they estimate. It was still enough to earn him a prison sentence.

Others would pay with their money. The list of Benko’s creditors would come to include private banks, savings banks and insurance companies. What they were left holding is where this story ends. But under all of it lay one more thing: cheap money. Signa’s push into Germany, Switzerland and further afield had ridden on low interest rates. That ride would last only until Russia invaded Ukraine, and inflation and interest rates surged.

In November 2023, work stopped on a skyscraper in Hamburg, Germany. It was the Elbtower, meant to stand 800 feet tall, and it was still unfinished. It belonged to Signa Prime Selection, the company you were asked to remember. That same month, Signa Holding’s shareholders and lenders confirmed that René Benko would step down from the board. He had stepped back once before. This time, he was stepping down. And before the month was out, things got much worse.

On 29 November, Signa Holding declared insolvency. It went to the Commercial Court in Vienna, asking to restructure under its own management. It was Austria’s biggest bankruptcy since the Second World War. So how did an empire go bust so fast? Property values were falling, and its debts had grown. Building costs were high, and the interest on its loans kept rising. The cheap money that had built Signa was gone. Less than two years after the Selfridges deal, Benko’s empire was insolvent.

That December, Signa Prime Selection went bankrupt too. The KaDeWe building and that unfinished tower in Hamburg were caught up in the bankruptcy. Signa Prime faced an extraordinary debt charge of 10.3 billion euros, and it could not honour all its loans. Remember the payments from the opening question? One of them went out around this time, while Signa was already in financial trouble. Hold on to that.

In the new year, the car rental company Sixt poked fun at Signa’s bankruptcy. Its advert, made with AI, put a fake banner across the stalled Elbtower. In March 2024, Benko himself filed for insolvency, as a sole trader. Now the trophies started to go.

Weeks later, Central Group, Signa’s partner in Selfridges, bought the KaDeWe building from the insolvent group. It had already bought 49.9 percent of KaDeWe the year before. That single building cost Central as much as the whole fundraising round that Niki Lauda’s family office had joined. Later that year, Central took over the whole KaDeWe Group. After Signa’s collapse, Saudi Arabia’s Public Investment Fund took 40 percent of Selfridges, leaving Central with 60 percent.

The toys went too. That same year, Benko was forced to sell his private yacht, Roma. A year earlier, it had been estimated to be worth around 40 million euros. His foundation had bought a painting by Pablo Picasso in the year of the Selfridges deal. Now the foundation authorised Sotheby’s, the New York auction house, to sell it. Early the next year, a buyer paid about 11 million euros for it. And the hardest blow was still to come.

By then, Benko was under investigation in several countries. Prosecutors in Liechtenstein had opened criminal proceedings against him. In Trento, Italy, prosecutors had issued a warrant for his arrest and searched several of his private offices and apartments. At home in Austria, prosecutors suspected him of trying to hide Signa assets from investigators. They also cited a risk that evidence could be obscured. Benko has always denied every accusation. In January 2025, Benko was arrested, and he has been in custody ever since.

Back in that courtroom in Innsbruck, the prosecutors’ case against René Benko came down to a gift and a rent payment. Together, they added up to about 660,000 euros. Prosecutors put the damage from possible crimes around Signa’s collapse at roughly 300 million euros. And to explain one of those payments, Benko would end up talking about his children.

The gift is the payment you were asked to hold on to. In late 2023, Benko sent his mother 300,000 euros. Prosecutors said the money was what remained of a larger payout from a family trust. Then there was the rent. About 360,000 euros, paid up front for a villa on the Hungerburg, in Innsbruck. The villa, prosecutors said, could not be lived in and needed repairs. Paying for it in advance, they argued, made no economic sense.

Benko’s lawyer, Norbert Wess, hit back. His words to the court: “It is absurd to accuse Mr Benko of having deprived his creditors of their assets.” Renting that way, he argued, was perfectly normal and allowed. And Benko, he said, had moved in with his family sooner than the prosecution claimed. Benko himself said his lawyer had shown the accusations to be false. On one of the payments, the court would clear him. For a while.

On 15 October 2025, the court gave its verdict. Guilty, over the gift to his mother. The court found the money had been sent to keep it out of his creditors’ reach. In Austria, the term for this is Krida: deliberately shrinking what creditors can claim. He got two years in prison, and this sentence was not suspended. On the rent, though, he was acquitted.

That December, a second trial ended in another conviction, for keeping watches and cufflinks from his creditors. It brought a suspended sentence and a fine, and that verdict is now final. Both sides had appealed the first verdict. Austria’s Supreme Court upheld the conviction over the gift. But in July 2026, it threw out the acquittal over the rent and ordered a new trial. And at the retrial, Benko himself would give evidence.

On 22 September 2026, Benko was back in court. The retrial was held in the large jury courtroom of his home city’s regional court. The year before, he had refused the judge’s questions. Now, for the first time in any criminal case over Signa’s collapse, he gave evidence. He insisted that even as Signa filed for insolvency, he still believed it could be rescued. So why rent a villa that prosecutors called uninhabitable? His explanation: the villa was rented at his wife’s request. The family wanted the children to have a “normal life”, he said, with ordinary school days and no staff.

The retrial lasted a single day. Guilty, over the rent. That money had gone, shortly before the insolvency, to the company that owned the villa. He was cleared only of running costs for the villa, also paid in advance. The court added six months to his sentence, and ruled out early release at the halfway mark. The gift and the rent: both payments now counted against him. Thirty months in prison, now final.

The next month, Germany’s last remaining department store chain filed for insolvency for the fourth time. It was Galeria, the chain Signa once had all to itself. Its roughly 12,000 employees were told on a Friday morning, and now they fear for their jobs.

The last time, it had filed only weeks after Signa’s own collapse. Nine of its department stores had to close. Then the chain was sold. Its buyers included Richard Baker, the boss of Hudson’s Bay, the company that had sold Kaufhof to Signa in the first place. This time, it is not yet clear which stores, if any, will close. Even the staff’s insolvency pay is in doubt.

What about the banks? Since the collapse, Signa’s creditors have filed claims worth billions of euros. They include some of the biggest names in finance: Deutsche Bank, Allianz, Julius Baer and Raiffeisen Bank International. In 2023, the Swiss wealth manager Julius Baer had to write down 606 million Swiss francs on loans to René Benko’s group. Its chief executive, Philipp Rickenbacher, lost his job.

Now Switzerland’s financial regulator, FINMA, has closed its proceedings against the bank. They covered those loans and a separate case over the bank’s anti-money-laundering checks. The regulator’s statement never even named Signa, only a European group. It was FINMA’s fifth such case against Julius Baer in less than a decade. The bank must hold an extra 250 million Swiss francs in capital, and it cannot pay dividends without the regulator’s approval. Julius Baer says it has quit private lending altogether.

And how far does the criminal investigation reach? Austria’s economic crime prosecutors are now looking into 17 separate matters around Signa’s collapse. Benko is not the suspect in all of them. Some of the allegations concern other senior figures at Signa. Investigations into further accusations around his own insolvency are still open. His next trial opens in early November, and the sum at stake is far bigger than before.

That trial brings back a familiar name: Hans Peter Haselsteiner, the former boss of Strabag. Prosecutors allege that Benko gave Haselsteiner’s family foundation an untrue guarantee. That guarantee, they say, led the foundation to wire money to Signa Holding and to hold off on reclaiming more. According to the charges, it promised the foundation around 5 million euros, and that money never came. That alleged loss is more than seven times what the gift and the rent came to.

Benko’s lawyer, Norbert Wess, rejects the charges. He says he cannot make sense of them, even in legal terms. And the money claimed from the foundation, he says, was already overdue before any guarantee was given. The same trial covers another charge: prosecutors allege that Benko hid a hunting rifle worth 80,000 euros from his creditors. Wess says the rifle never belonged to Benko at all. Haselsteiner himself is among 13 witnesses expected to be questioned.

So who was left holding the losses? Investors right across Europe. Creditors, with billions of euros in claims. Galeria’s staff, still waiting to learn their fate. And the founder himself, insolvent and in prison in Innsbruck. He denies the charges, and if he is convicted at the trial in November, he could face up to ten years in prison.

Europe’s property downturn claimed no bigger casualty than Signa. Yet so far, its founder has been convicted of insolvency fraud over much smaller matters. A gift to his mother, a villa’s rent paid up front, and watches and cufflinks kept from his creditors. Every day in custody since his arrest counts toward his prison sentence. And in Hamburg, plans for the unfinished Elbtower include housing the city’s natural history museum.

Whatever November brings, prosecutors are still investigating Signa’s collapse. The empire is gone, but René Benko’s trials are not over.