Benko

"Benko often had the luxury of his private life paid for by Signa: the operation of his 62-meter yacht "Roma" as well as the upkeep of the two airplanes and various estates from Innsbruck to Lake Garda, which he occupied with his wife Nathalie. The shareholders often found out afterward that they had to cover significant parts of Benko's extravagances. Even the ongoing costs of his villa in Sirmione on Lake Garda were partially paid by Signa Holding. According to research by the Austrian newspaper Standard, they transferred 20,000 euros per month plus additional costs for the supposed Italian headquarters of Signa, although no 40 kilometers away at Lake Garda in Gardone Riviera, other villas of Signa existed, including an infinity pool."

"The Falcon Private Bank, which is connected to the state fund of the Emirate of Abu Dhabi, also ranks among Benko's influential allies. There seem to be no limits standing in the way of Benko's plans. The 36-year-old self-made millionaire from Innsbruck is aiming for the billionaire class."

"The Falcon Private Bank, which is connected to the state fund of the Emirate of Abu Dhabi, also ranks among Benko's influential allies."

"The son of a civil servant and an educator from Innsbruck does not hide his wealth. On weekends, the millionaire likes to invite guests to his villa on Lake Garda or to his hunting grounds in Tyrol. In his villa on Hungerberg in the Vienna Woods, there are a few Warhols on the wall, a Ferrari in the garage, and a private jet waiting for him at the airport. At least, that's what the Austrian tabloid press seems to know about Benko. Furthermore, it is reported that on November 2, 2012, he was sentenced by the Vienna Regional Court, along with his tax advisor Michael Passer, to a suspended prison sentence of one year for "attempted illegal intervention." According to reports, Passer had contacted the former Croatian Prime Minister Ivo Sanader and offered him 150,000 euros to influence a proceeding in Italy in Benko's favor. However, since an appeal has been filed, the verdict is not yet legally binding."

"competent. In Switzerland, Benko early wins over Ernst Tanner, who has made Lindt & Sprüngli a globally known chocolate brand. The Swiss family Eugster, who have made a lot of money with coffee machines and other household appliances, will finally become one of Benko's most important investors with a 10 percent stake in Signa Holding."

"As an AWD employee, he got to know the local Innsbruck real estate tycoon Johann Zittera, who had made money by expanding attics in central locations. Benko convinced Zittera with his charming, confident demeanor. Even then, Benko knew how to fill the room with his mere presence. This was a skill that would later help him in acquiring his investors."

"Gusenbauer procured several contacts for Benko and remained the most eager lobbyist for Signa until its failure, however, he could not provide him with any money. Benko needs new financiers for his constant drive for growth. Not always do the financiers have an impeccable reputation. In 2009, the Greek shipowner George Economou joined Benko, whom he met at an event organized by HSH Nordbank in Athens. The meeting was titled "Real Estate meets Shipping," to which the US real estate giant Hines was also invited, along with Benko."

"After the conviction, private investors become even more important for him. When shipowner Economou wants to pull out in 2015, Benko brings two more investors into the holding: on one hand, the then Lindt & Sprüngli CEO Ernst Tanner, who is considered an impeccable businessman, and on the other hand, the Swiss Falcon Private Bank. It is indirectly state-owned by Abu Dhabi, does not enjoy the best reputation, and will soon have to answer allegations of money laundering."

"One person who acted like a catalyst for Benko's career is Karl Kovarik, a very wealthy heir to a gas station empire, who financed the young Innsbruck businessman after Benko had previously sold a penthouse apartment to Kovarik's brother-in-law. The gas station king invested about 25 million euros in Benko's first company, Immofina, renamed Signa in 2006. Benko and Kovarik each held half."

"As an AWD employee, he got to know the local Innsbruck real estate tycoon Johann Zittera, who had made money by expanding attics in central locations. Benko convinced Zittera with his charming, confident demeanor. Even then, Benko knew how to fill the room with his mere presence. This was a skill that would later help him in acquiring his investors."

"Solid business operations and trust in the solidity of the real estate business were left by the wayside. Even though the business and legal processing will take years and it is likely that Benko will have to face court, he did not build the castle in the air called Signa alone. He readily found financiers, including wealthy private individuals, bank managers and insurance people, foundation managers, and Arab sheikhs."

"When Zittera closed his business around the year 2000, Benko took off – he started his own business. He maintained the business model he had learned – buy cheap, renovate, sell expensive. However, he refined it and expanded the development of attic apartments into expensive penthouse properties including medical and health centers. Thus, Benko early acquired a purchase option on the well-known Tyrolean wellness oasis "Lanserhof" when the owners needed money. He profitably passed this on. With this, he became an early millionaire in schillings."

"Berger, who enjoys taking risks but is a realist, knows his value to Benko very well. Thanks also to the almost inexhaustible network of the advisor, Benko can gain connections in politics and new investors. Thus, Robert Peugeot from the namesake auto dynasty likely places his trust and invests in Benko's company also because his good old acquaintance Roland Berger is among the shareholders. And for Klaus-Michael Kühne, majority owner of the forwarding company Kühne & Nagel, the name Robert Peugeot matters when he joins the circle of investors years later."

"However, not everything is going well for him in these years. In 2013, the Vienna Higher Regional Court convicted him to a one-year suspended sentence, a verdict later confirmed by the Supreme Court in the following year. According to the court, Benko aimed to resolve a Signa tax issue in Italy quickly and in his favor. He had promised 150,000 euros to a former Croatian Prime Minister to influence the Italian Prime Minister Silvio Berlusconi. The Viennese judge referred to it as a "textbook case of corruption.""

"Also, most active politicians are not bothered by the conviction. This becomes apparent year after year at Benko's coveted invitations to Törggelen in November, a South Tyrolean tradition that the shrewd entrepreneur imported to Vienna into the sumptuous Palais Harrach, his corporate headquarters. There, people meet to taste the young wine under high ceilings, drink and eat, and willingly get photographed, so that the significance of the host becomes visible in Austrian media. The Chancellor at the time, Sebastian Kurz from the ÖVP, is present at the tasting of the new wine, as is the temporary FPÖ leader Heinz-Christian Strache, who would later cause a stir across Europe with his Ibiza video."

"People are eating out of Benko's hand, and the billionaires are feeding him fresh money. His narrative of Signa as the real estate company, which, thanks to the entrepreneurial genius of its founder, is better than all the others, fits perfectly with his clientele. One of his early fans, the entrepreneur Torsten Toeller, recounts Benko's strengths today with which he could dazzle: "I overestimated the energy and strategic understanding of a young supposed exceptional entrepreneur for too long and didn't recognize the story behind the story that René Benko has always told so eloquently.""

"At least once, he was a guest with other partners in the villas that Benko had built above Lake Garda – really, to sell them at a high price. Benko had Berger picked up by helicopter for a working meeting of the advisory board in the "Villa Eden" at Gardone Riviera on the western shore of the lake that was named by Benko."

"Benko, the dropout from Innsbruck, accumulates wealth like a Silicon Valley magnate. Or like one of those hedge fund owners from the USA who earn billions of dollars in good years – and whom Benko styles his life after. Why not? Benko's business ideas promised him and his investors very decent returns for the coming years as well."

"Even on {{id_001}}'s yacht "Roma," where regular meetings occur during the summer half-year, the sun and the Mediterranean are just ingredients added to the usual: work. {{id_001}} usually arrives by private jet – with the larger Bombardier or sometimes with the smaller Cessna. But always with several bodyguards, with whom {{id_001}} surrounds himself early on. His bodyguards, about five in number, often come from an Austrian elite unit, the Cobra Commando, which protects high-ranking politicians."

"It is also known that shortly after his forced resignation as chancellor, Kurz was paid by Benko because his company, following bankruptcy, filed for a residual claim of 1.65 million Euros. This money is supposed to be his as part of a brokerage fee for a 100-million-Euro loan from the United Arab Emirates."

"In 2011, Benko, an avid skier, bought a dilapidated hotel in the winter sports resort of Oberlech and transformed the area into "Chalet N," affectionately named after the initial of his wife's name. Theoretically, the house can be rented for 350,000 euros a week, but in practice, Benko mainly uses it himself during the winter. His family spends several weeks there every year, and he often invites business partners or employees for strategy meetings. Thus, they gather in a larger group before the merger of Karstadt and Kaufhof to consider the next steps."

"Right next door is Benko's hotel, the Park Hyatt, which used to house the Austrian Länderbank and now rents rooms for a price between 500 and 1000 euros per night. Thus, a significant increase in value emerged, not just on paper, within a few years."

"Benko is clearly in his element, with the certainty in his mind that he has made it. But above all, business is also conducted on the yacht. Benko often receives important employees aboard the ship by the hour. A brief chat, how is the family doing, then Benko quickly gets down to business. It was always about business topics, tells someone who was frequently on board and was flown in for this."

"Benko, in any case, had created a world of his own, which many aspired to access. Because they wanted to belong. Or, if they had already been rich for a long time, because they wanted to get even richer with the help of the generous and obviously very shrewd man."

"Benko's gold rush in concrete has, in addition to macroeconomic reasons, very specific ones as well. A long-standing senior executive at Signa lists three arguments for investors: Benko paid up to 6 percent dividends each year, whereas real estate usually only yields 2 to 3 percent. The shares increased in value year after year. Moreover, Benko concluded secret deals with individual financiers like Roland Berger, Klaus-Michael Kühne, or Torsten Toeller. He gave them the option to exit and return their shares if they wanted to. This made the shares fungible, as if investing in stocks – very unusual in the real estate business, which is typically long-term and therefore requires long-term capital planning."

"Even two wealthy entrepreneurs, accustomed to luxury, who know Benko's yacht, his penthouse in Vienna, and his Chalet N in Lech, were quite shocked after a tour alongside Benko, accompanied by a handful of bodyguards. They unanimously say: "The penthouse was the most ostentatious thing I have ever seen in my life." One was reminded of the apartment "of a Russian oligarch or a Saudi ruler." Another found it "vulgar" - which in this case means the opposite of ordinary - and compares the apartment to those of American hedge fund giants with annual incomes of several hundred million dollars; people whom Benko has always emulated."

"All deals with investors, especially in the year before the bankruptcies, will be closely examined by the insolvency administrators. Were they conducted at market prices? Did they drain liquidity from the company? Then they will be contested and unwound. Because the high payments further depleted the various Signa companies – and thus contributed to the end of Benko's baby."

"Benko almost exclusively took care of investors in all Signa divisions, as well as all major acquisitions or new projects. The appearance and content of the presentations had to get Benko's approval. Even some articles in the "Signa Times," the company's own public relations organ, were something the boss wanted to review – for which Chairman Berninghaus personally wrote texts. Clearly, the example of the top boss had set a precedent."

"What did not change: Benko wanted to continue making both small and large decisions. When he went on trips, he filled his pockets with countless printouts to work through on the plane or in the car. It could take weeks before he engaged with them and made a decision. Until then, nothing happened. Thus, Benko, who had always spoken of quick decision-making paths, unintentionally slowed down the pace of Signa. His unwillingness to give the company an organization that would have been appropriate for its size also had fatal effects. A long-time leading expert at Signa, the finance and trade expert Wolfram Keil, summarizes: "René Benko had completely tailored the company to himself and did not change that even when Signa had grown significantly and became a conglomerate. Almost all important decisions had to be made by him. Thus, he became a bottleneck for the entire organization.""

"Fenk attracted individual investors and tried, albeit unsuccessfully, to organize a bond for Prime Selection. Later, in mid-2021, they managed to place a 300-million-euro bond for the Development project division with an interest rate of 5.5 percent. But by that time, Fenk had already resigned because he quickly noticed that Benko continued to act as he pleased. And he realized that Signa was dangerously highly indebted around the years of 2020."

"Most of the shareholders did not have Benko's private foundation as a contracting partner, but the holding company. Roland Berger, who had invested in low percentages in the Signa companies Prime, Development, and Retail, managed to partially exit. Apparently, he pressed for payment from Benko early on and exchanged about half of his Prime shares for money. Berger benefited from the high market value of the shares, which had multiplied since his entry. However, at the end of the day, Berger will likely exit his Signa investment with a small double-digit million loss, Torsten Toeller will lose a triple-digit million amount, and in the fiscal year 2023, he will write off a book value of 196 million euros, which can be read in the annual financial statement of "Fressnapf" Luxembourg."

"Benko invited them to his yacht "Roma" or his estate high above Lake Garda, or he quickly flew to Dubai or Abu Dhabi, to Hamburg or Vienna on his private plane. And all the economic experts willingly gave him capital, apparently without really examining his business model."

"However, many things were quite different from what is known from the stock market, where all shareholders are treated equally. Benko is said to have told each Signa investor their own tailored story. Many had an individual special deal. Some, like the RAG Foundation or Kühne, received dividends for 2022 if they made a fuss – something the other shareholders were not allowed to know. Some, like Roland Berger or temporarily Torsten Toeller, were allowed to attend the supervisory board of Prime as guests if they insisted. Others were not. Numerous investors were given put options, which allowed them to exit within certain periods. Others were not."

"Benko started as a start-up entrepreneur and simply remained one, even as the company branched out and grew in width and height. Other start-up entrepreneurs eventually bring in experienced managers to reorganize the company – like Google's bosses did with Eric Schmidt, who had previously led traditional IT companies, or Facebook's Mark Zuckerberg with manager Sheryl Sandberg, who had stints at McKinsey and Google."

"Just three days before, on May 5, KPMG had audited the financial statements without any restrictions and quantified the risks. The book values had decreased, and thus also automatically the shareholders' equity of the companies. Benko, who himself holds 48 percent of the holding, is campaigning for a capital increase. He wants half a billion euros, and the round neither rejects nor agrees. But Benko leaves the meeting feeling that there is still something to be gained. It should by no means be a "Mickey Mouse capital increase," he tells confidants."

"The collaboration with his merchant Dieter Berninghaus seemed most likely to develop into a friendship. Operating as "B and B," the two, some who had previously felt closer to the sun named Benko, complained that Berninghaus monopolized the contacts. And indeed, Berninghaus could afford to ask Benko to wash his hair before a joint business meeting. However, Berninghaus was important between 2013 and 2022 mainly because Signa spectacularly expanded its trade business, and Benko understood less about it than Berninghaus did. Moreover, the merchant had good contacts with wealthy people worldwide, who could be business partners and potential investors. Today, B and B are outright enemies. Benko probably eventually saw that Berninghaus was representing the interests of other investors in the holding rather than his own, and suspected Berninghaus of switching sides. The merchant, in turn, felt deceived by Benko when he tricked during the takeover of the British retail chain Selfridges and offended long-standing partners like the Thai Central Group."

"Most of the shareholders did not have Benko's private foundation as a contracting partner, but the holding company. Roland Berger, who had invested in low percentages in the Signa companies Prime, Development, and Retail, managed to partially exit. Apparently, he pressed for payment from Benko early on and exchanged about half of his Prime shares for money. Berger benefited from the high market value of the shares, which had multiplied since his entry. However, at the end of the day, Berger will likely exit his Signa investment with a small double-digit million loss, Torsten Toeller will lose a triple-digit million amount, and in the fiscal year 2023, he will write off a book value of 196 million euros, which can be read in the annual financial statement of "Fressnapf" Luxembourg."

"Not only did HCOB get rid of its old premises to Signa and took up new offices from Signa, but it also sold the credit for the sale: 166 million euros went to Benko as financing. And even the law firm advising HCOB on the deal is a familiar one: Freshfields with Conradi, who also supported the City of Hamburg in the sale of the Elbtower."

"Benko could no longer count on the banks since the intervention of the regulatory authorities. They fled from Signa. This was also evident in Benko's most important project: the Hamburg Elbtower. The fact that the Landesbank Hessen-Thüringen (Helaba) finally withdrew its loan commitment for the Elbtower at the beginning of 2023 and the capital-weak Signa would almost be left alone with the estimated construction costs of 950 million euros, most shareholders found out only months later. Just like the city of Hamburg, which wanted to build its largest current architectural showcase project with Benko."

"In April 2020, the month in which Galeria sought protection under the protective shield, Benko gave his investors a "Status Update". In the 65-page document, the entrepreneur advertised more than 1 billion euros in net profit and a real estate value of 18.3 billion euros for 2019. This was followed by a slideshow, a glossy presentation of his properties one after the other – from the Globus buildings to the Bauer Hotel in Venice. The document speaks of more than 550,000 square meters of office space, ten hotels, more than 7,400 apartments, and 290,000 square meters of commercial space. In the German-speaking region, Signa sees itself positioned directly behind Aroundtown, a real estate corporation listed in the MDAX. The word "crisis" is not mentioned at all in the update. Despite this, the demand for office spaces dramatically drops, and vacancies in cities are on the rise. Nevertheless, Benko plans as if Signa were immune to crises. He continues to invest in office towers, hotels, and department stores. In the pipeline are projects which, with a market value of around 23 billion euros, would double the property value by 2023."

"In August 2022, Signa even closed the biggest deal in its history: Benko, with his Thai partners from the Central Group, bought the British luxury department store chain Selfridges for 4 billion pounds. And in Hamburg, Signa had already made all the preparations for the construction of the 245 meters tall Elbtower. The contract with the city was long signed, the excavation pit was dug, and the construction started promptly in January 2023."

"How exactly the vote on the Elbtower went, during which Signa received the approval for the construction of the high-rise, the red-green government in Hamburg prefers to remain silent, just as they gradually revealed the truth in the Cum-Ex investigations concerning the Hanseatic bank Warburg. Not even the question of whether Scholz attended the crucial meeting of the Hafencity GmbH was to be answered. It took the Bild newspaper to sue for the right to information. The result: Scholz was present. The Elbtower was designed by British star architect David Chipperfield, who has already realized the luxury resort "Villa Eden" on Lake Garda with Benko and built the Innsbrucker Kaufhaus Tyrol. For Hamburg, Chipperfield is designing an impressive counterpart to the Elbphilharmonie, a long, slightly step-like rising giant, which is supposed to surpass all dimensions of what has been built in Hamburg to date. Upon completion, the plan is for the Elbtower to be one of the tallest buildings in Germany. Regarding the investor, Signa from René Benko, which received the contract in a single-step selection process, Scholz had only words of praise on this festive day. It is "an outstanding real estate company" that has proven it can "handle very large projects." "Financially strong" with an "A+ rating" and a "very good reputation among reputable banks." A few years earlier, René Benko had taken over the Alsterhaus."

"Due to the pandemic, the vulnerabilities of Signa have become publicly visible. Although everything appears neatly separated on Benko's charts, the units within the Signa empire are not so easily separated. The struggling trading business directly affects the real estate business, as the holding company must pump large subsidies into the distressed business. At the same time, rental income in the amount of a double-digit million figure is lost. This has earned the real estate group's good A+ credit rating the unfortunate addition of "Watch.""

"Later, the works councils of the department store chain will accuse Geiwitz of not having restructured in the interest of Galeria, but for Signa. While most landlords of the Galeria buildings granted considerable rent reductions, the contracts with Signa as a landlord remained unaffected. Geiwitz confirmed to several participants that he had no leeway. Benko had been very strict. Because a correction of the rents downwards would have immediately triggered value adjustments in the properties of Signa - and thus probably turned the previously reported profits into losses."

"The side deals with individual shareholders are unknown to the others. Benko knows how to make every investor feel that they, and only they, are favored and treated exceptionally well. Benko evidently offers the best of all worlds: high growth, secure dividends, and the option to exit at any time. An outstanding and unprecedented combination in economic history, justified by the innovative business model of Signa."

"However, in the wild growth years of Signa with its shiny polished balance sheets, there is no talk of this yet. Benko cultivates his image as a workaholic, which goes down well with the financiers. Someone who earns his money and does not just receive it. For him, it had been a good day when he had worked continuously, a manager recounts. When Benko vacationed on his yacht, he invited his top people to the "Roma" to hold meetings from morning to evening. Occasionally, the children of the executives would run around them. It was not always efficient."

"In the end, the winners and losers of the Galeria bankruptcies during and shortly after the coronavirus pandemic become clearly apparent. In the first bankruptcy proceedings, 81.4 million Euros are incurred for consulting fees, 41.5 million of which were expenses for the protective shield procedure, and 39.9 million flowed in the subsequent bankruptcy proceedings. A large part of that is collected by Geiwitz and his people, and in the second process, it is around 52 million. Nearly ten thousand jobs are lost. And the fool is undoubtedly the state. In total, two loans amounting to 680 million euros are being provided by the Economic Stabilization Fund for Galeria – amid considerable doubts from some actors and also criticism from the public. Why invest money in department stores when time has passed them by and fewer and fewer customers are wandering into the largely deserted floors manned by salespeople? Why give money to Benko and his Signa when he continues to report high profits for his real estate and in the crisis year of 2020 delighted his investors in the Prime with distributions of more than 200 million euros?"

"Benko and his partner Aby Rosen pay 150 million US dollars for the icon in the USA, a "bargain" as it is called at Signa. But even then, real estate experts assessed the purchase more critically: the Chrysler Building, a "high security risk" that is dilapidated, with 20 percent vacancy and standing on a plot whose owner demands exorbitant rent. Many funds had previously reviewed the takeover and declined. Also, a Signa manager referred to the purchase as a "media gag," an acquisition for headlines announcing Signa's leap overseas with the newly founded RFR US Selection AG. The deal lacks economic logic. It was only purchased to show off. Sometimes, it seems that Benko was also simply about possessing, says a Signa manager, maybe even collecting."

"But that does not happen. Benko's foray into the media landscape brings him a lot of trouble with his co-shareholder Christoph Dichand, who publicly attacks him in an interview in the summer of 2020 with the Süddeutsche Zeitung: Benko is only interested in "personal vanity", according to Christoph Dichand. "Anyone who buys foreign reputation to attach it to themselves ruins it." Extensive contractual advantages in favor of the Dichands prevent Benko's plan from taking hold at Krone."

"With this fashionable gibberish, he seems to want to distract from the fact that with the partial acquisition of the Krone, he primarily wants to buy power and social prestige. In conversations with journalists, he talks about how important press freedom is to him and that it must be protected against attacks from the outside, only to later, when things get critical for him, unleash well-known media lawyers on them beforehand. The authors of this book have also had experiences with Benko's lawyers in the past. Top professionals in the field like to work for him, such as Berlin media lawyer Christian Schertz. Instead of responding to specific questions, Schertz sent the note that the questions "almost invariably contain false assumptions and numbers" – a popular, albeit rarely successful, method of deterrence."

"And Benko served the fantasy of ever higher, further, better with new acquisitions. Thus, he transformed the real estate company Signa, which only invested in prime locations in core Europe, into a conglomerate of real estate, trade and media, and also a bit of digital business. From a business in which he was more knowledgeable than anyone else, it becomes an increasingly complex conglomerate."

"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."

""Pangs of conscience are rather insignificant among white-collar perpetrators. They often say: I haven't done anything that every bank doesn't do. They believe they were just unlucky," Thomas Knecht references the literature. One cannot speak of Benko as a perpetrator in the criminal sense at least in the summer of 2024, because up to that point not even an indictment had been made, and Benko denies any wrongdoing. However, the question of responsibility for the spectacular crash arises – and in Benko's megalomania, most answers are found."

"In 2013, Benko entered the German department store business with the purchase of Karstadt, more of an opportunity than a long-planned venture. Five years later, he also secured the acquisition of Kaufhof after a long attempt."

""Pangs of conscience are rather insignificant among white-collar perpetrators. They often say: I haven't done anything that every bank doesn't do. They believe they were just unlucky," Thomas Knecht references the literature. One cannot speak of Benko as a perpetrator in the criminal sense at least in the summer of 2024, because up to that point not even an indictment had been made, and Benko denies any wrongdoing. However, the question of responsibility for the spectacular crash arises – and in Benko's megalomania, most answers are found."

"In this phase, Signa grows both vertically and horizontally. Investors uncover initial weaknesses but ultimately stay on board because the Net Asset Value, the property value, continuously grows. Internal warnings from individual managers about what would happen to Signa if interest rates rose were sharply countered by Benko: he is an entrepreneur, not a non-entrepreneur."

"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.""

"But why did it bother the parent corporation so little that the subsidiary could not operate profitably? The answer lies in Benko's core business: real estate. The rental payments from Galerias to the Signa parent company supported the Benko system. With them, he inflated the value of his properties over the years. Because the value of a property in the balance sheet is not only measured by location and condition. Decisive are also factors such as the general development of property prices, but above all the rents that are paid for the respective property."

"Benko generated 140 million euros, only then was a protective shield procedure possible, in which, unlike a complete bankruptcy, the owner still has control. The protective shield procedure offers Benko - besides the risk of a poor image - also opportunities. Lease contracts can be terminated more quickly, employees can be laid off more easily, and the already planned restructuring can be done more radically and in fast-forward. Signa's man for the protective shield procedure is a familiar face to Benko: Arndt Geiwitz, the tax consultant and auditor known to the broader public from the Schlecker insolvency. Benko first hired Geiwitz in 2013 during the purchase of Karstadt, where he had him review the finances. He also assisted in the takeover of the Otto subsidiary SportScheck. Now he is supposed to reorganize the department store business at Galeria. In the end, around 40 branches will close. No one among the top executives had experience with a protective shield procedure, says a trade manager. Geiwitz, on the other hand, would have known how to quickly set up a protective shield procedure, how to control the creditors' committee, which people to bring in; he did all that very cleverly."

"Alannah Weston and her family are among the wealthiest in the world, yet she has no money to spare. After all, Selfridges is not just any department store, neither for the owner nor for the employees and the customers. This luxury monument attracts six times as many visitors annually as the Tower of London. Who can estimate what a private equity firm would do with such a jewel? How would that be received by the English? Benko courts and argues: He respects the tradition, the treasures in his luxury empire he sees as a long-term investment."

"In 2017, the foundation board decides to invest in Signa, with RAG acquiring a 5 percent stake in Prime and a 3.5 percent stake in Development, almost simultaneously the Agricultural Insurance Association from Münster (LVM) also strikes. Benko is aware of the needs of insurers and foundations that rely on generating returns. Representatives of the RAG Foundation even join the supervisory board of Signa real estate companies, but remain largely invisible there."

"In 2018, Benko takes over the furniture store chain Kika/Leiner from the South African Steinhoff group, thereby relieving the young Austrian Chancellor Sebastian Kurz of a huge problem. "We as the federal government are very pleased that the imminent insolvency of the Kika/Leiner group could be averted at the last moment and an Austrian solution for continuing the operation was found," Kurz raves in the press release."

"But why did Benko make such unusual, legally borderline promises to his financiers that he would buy back their shares? And at the increased price due to the appreciation of the properties, not at the lower entry price? The answer is simple: Without the so-called put options he offered, Benko would have found much fewer investors. Roland Berger, at any rate, today answers the question of whether he would have given Benko money without a contractual exit clause with a clear and succinct no. The business economist and early warning signal, Professor Leonhard Dobusch from Innsbruck, says: "I believe the investors knew exactly how risky the business was and that it was a bubble. But they thought they could get out in time. For this, Benko gave them the put options.""

"With this fashionable gibberish, he seems to want to distract from the fact that with the partial acquisition of the Krone, he primarily wants to buy power and social prestige. In conversations with journalists, he talks about how important press freedom is to him and that it must be protected against attacks from the outside, only to later, when things get critical for him, unleash well-known media lawyers on them beforehand. The authors of this book have also had experiences with Benko's lawyers in the past. Top professionals in the field like to work for him, such as Berlin media lawyer Christian Schertz. Instead of responding to specific questions, Schertz sent the note that the questions "almost invariably contain false assumptions and numbers" – a popular, albeit rarely successful, method of deterrence."

"Berninghaus met Benko through detours. The German-American investor Nicolas Berggruen, whom Berninghaus calls a "mega close friend," sought contact with Benko in 2012. Two years earlier, Berggruen had presented himself as a good investor for Karstadt's department store business. A billionaire who invested his money in sustainable projects like renewable energies and made everyone believe that he was not only looking at the return but also had society in mind. Berninghaus is said to have advised Berggruen against buying Karstadt at the time. The lifestyle, without a fixed residence, with changing hotels as workspaces, the many parties – this way, Berggruen could not operate a business in Germany. A failure was predicted: After acquiring Karstadt, Berggruen's involvement with the department store ceases. He leaves the management to others, Karstadt continues to incur losses. This is followed by layoffs, investments are at zero, and the smart billionaire increasingly withdraws from the public eye. While Berggruen begins to regret purchasing Karstadt, Berninghaus meets a Signa manager at an evening event in Nuremberg. Berninghaus, then still the trade director of the Swiss chain Migros, starts chatting with the Benko man. In the end, there is a promise to introduce Berninghaus to Benko."

"The side deals with individual shareholders are unknown to the others. Benko knows how to make every investor feel that they, and only they, are favored and treated exceptionally well. Benko evidently offers the best of all worlds: high growth, secure dividends, and the option to exit at any time. An outstanding and unprecedented combination in economic history, justified by the innovative business model of Signa."

"In 2019, Signa acquires the retailer SportScheck from the Otto Group. The idea had been to merge Karstadt Sports and SportScheck as a counterforce to Decathlon and Intersport. They believed Benko could do it, says a participant from back then. As a dowry, Otto gives Signa a buyer loan, a double-digit million amount, for which Signa Holding and Signa Retail guarantee."

"That Benko himself did not pivot in 2022 or 2023 and tried to at least save parts of the business with a radical cut may be surprising from the outside. But for nerve-strong financial artists like him, this is typical. Eventually, they believe their own narratives. Or they can no longer turn back. Even after the first major bankruptcy, that of Signa Holding in November 2023, Benko spread confidence that a financier would soon be found. Day by day he was on the phone or jetted to a potential financier worldwide. Even in January 2024, he still said that he had a new investor on the line; there were just a few details to clarify over the weekend…"

"Long ago, Benko also no longer focused on a single object, instead, he initiated dozens of renovations in parallel following the pattern of the Golden Quarter. The Prime division grew and flourished, doubling its value within a few years. At the same time, more and more money flowed into the project business."

"Wiedeking was the first to suspect, perhaps even too soon, a Ponzi scheme. That is, Signa could only pay its high dividends because it kept raising fresh money from banks and private lenders. Above all, Wiedeking was annoyed that Benko did not present him with all the figures. And he threatened with a special audit, which he wanted to enforce as a supervisory board member, as he said in discussions with various media. "I suspected as a shareholder that the figures presented by Mr. Benko did not match the ongoing business," Wiedeking said in retrospect. "I confronted him with questions that he could not answer sufficiently for me. He could not or would not give me satisfactory answers. That is why we went our separate ways. In hindsight, given the evidence and allegations now against Signa, I must assume that my fears were all justified." For Wiedeking, the commitment and timely exit paid off. He managed to more than double his investment within a few years. He chose reason over greed because he did not trust Benko's promises of an even rosier future. However, the ruler of the Signa conglomerate managed to prevent a mass exodus among his investors. Neither the founder of "Fressnapf" Torsten Toeller nor Niki Lauda, whom Wiedeking also tried to persuade to leave, followed the manager."

"Benko's gold rush in concrete has, in addition to macroeconomic reasons, very specific ones as well. A long-standing senior executive at Signa lists three arguments for investors: Benko paid up to 6 percent dividends each year, whereas real estate usually only yields 2 to 3 percent. The shares increased in value year after year. Moreover, Benko concluded secret deals with individual financiers like Roland Berger, Klaus-Michael Kühne, or Torsten Toeller. He gave them the option to exit and return their shares if they wanted to. This made the shares fungible, as if investing in stocks – very unusual in the real estate business, which is typically long-term and therefore requires long-term capital planning."

"Finally, says someone who often talked to him about investors, Benko considered normal board members more or less village idiots. The real heroes for him were the Blackrocks and Blackstones of this world, that is, the people who move – and earn – the most money."

"Real estate experts estimate the apartment's value at 30 million Euros, with a price per square meter of 30,000 Euros, paid for hyperluxury locations in Berlin. And the best part for Benko: it cost him personally nothing or very little. For it was part of Signa Prime and was managed as his personal office, thus the rent, the staff, the food, or the wine were at least largely free. His media lawyer, when asked, labeled it as "office" – despite many living spaces and a bedroom with a huge, round bed. "There is no 'penthouse' in Upper West, but rather a 33rd office floor used by Signa, with extended representation and hospitality areas," he stated."

"And Benko served the fantasy of ever higher, further, better with new acquisitions. Thus, he transformed the real estate company Signa, which only invested in prime locations in core Europe, into a conglomerate of real estate, trade and media, and also a bit of digital business. From a business in which he was more knowledgeable than anyone else, it becomes an increasingly complex conglomerate. In 2013, Benko entered the German department store business with the purchase of Karstadt, more of an opportunity than a long-planned venture. Five years later, he also secured the acquisition of Kaufhof after a long attempt. With the idea of merging into the German Department Store AG with high synergies, he attracts fresh investors. Among them is Roland Berger, who invests in the still-young retail division, but also in the two main Signa companies, Prime and Development."

"Mezzanine means intermediate floor, is a term from architecture, and includes forms of financing that are somewhere between equity and debt capital. Thus, insurance companies provide mezzanine that has a higher interest rate than first-class mortgage loans, but have the disadvantage that they are subordinate in the event of insolvency. Especially in the real estate sector, mezzanine is highly favored because it can be displayed in the balance sheet as equity, although it must be repaid. Thus, Benko was able to regularly claim 40 to 50 percent equity to the public, although he had to repay a significant portion of the money: A legal and quite market-typical form of misleading."

"In an investor like the freight forwarder Kühne, Benko successfully played the role of the son that Kühne never had. He asked how he would tackle this or that business problem and was even invited by Kühne to the business summit in Mallorca at his hotel – an ideal playground for those searching for investors. "I know no one who could sell so effectively to his audience as Benko," says a confidant of Kühne."