UPDATE 1-Austrian prosecutors bring fraud case against fallen property tycoon Benko

Austrian prosecutors said on Tuesday they were bringing an insolvency-related fraud case against the former billionaire founder of the collapsed Signa property group, Rene Benko. Benko has been in custody for more than five months as the Central Prosecutors' Office for Economic Crimes and Corruption (WKStA) carries out a wide-ranging investigation into a range of offences including several counts of fraud he and other unnamed people are suspected of.

Austrian prosecutors said on Tuesday they were bringing an insolvency-related fraud case against the former billionaire founder of the collapsed Signa property group, Rene Benko.

Benko has been in custody for more than five months as the Central Prosecutors' Office for Economic Crimes and Corruption (WKStA) carries out a wide-ranging investigation into a range of offences including several counts of fraud he and other unnamed people are suspected of. One aspect is whether assets that should have gone towards paying back creditors were hidden, such as by being put in a trust of which Benko's immediate family are beneficiaries. He has denied the allegations made against him. His lawyer was not immediately available for comment on Tuesday.

"The prosecutors' office accuses Rene Benko of having prevented or minimised the satisfaction of creditors' claims in the course of his insolvency as an individual entrepreneur by allegedly deviating assets," the WKStA said in a statement. Specifically, this prosecution concerns a gift of 300,000 euros ($350,000) made to relatives and an advance payment of roughly 360,000 euros for rent and other costs relating to the rental of a home that was unjustifiable, the statement said.

The prosecution is the first stemming from the broader investigation, which covers various other suspected offences, with total harm caused estimated at roughly 300 million euros, the WKStA said. Benko and other unidentified people are suspected of committing offences including Benko passing off shareholders' investments in a capital increase as his own, fraudulently claiming COVID-19 relief funding by wrongly stating a chalet was operating as a hotel, and misusing funds provided by a sovereign wealth fund as loans towards a property project in Munich. ($1 = 0.8572 euros)

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