Abstinence From Unsustainable Leverage

“The investors also play along. "I understood the danger of over-indebtedness earlier. Practically, Benko generated a negative cash flow every year, so he relied on additional loans or capital increases," says Roland Berger, who thus became suspicious long before the first Signa bankruptcy. "But Benko has repeatedly shown that he could acquire fresh money."”

“It's only when it's too late that Berger, like most investors, realizes that the trading business is primarily intended to contribute to the real estate business. He receives his Signa shares not from a capital increase, but directly from Benko himself. Money that flows into the private sphere of the real estate juggler who gradually sells shares to further investors, thus increasing his personal wealth. The zero-interest phase plays into Benko's hands, the fundraising runs almost like the mechanism of an automatic watch. Everywhere, large institutional investors are looking for new investment opportunities, such as the RAG Foundation from the Ruhr area, founded to finance the perpetual burdens of coal mining in Germany, ultimately to save the Ruhr area from collapse.”