Deutsche Bank has cut ties to one of Europe’s most successful property developers over concerns about his involvement in a sprawling corruption investigation.
Germany’s biggest lender decided late last year to end its business relationship with René Benko, the Austrian real estate billionaire who co-owns Brown Thomas and Arnotts in Dublin, Selfridges in London, the Chrysler Building in New York and German department store KaDeWe, according to three people with close knowledge of Mr Benko’s financial affairs.
The only banking relationship Deutsche has retained with Mr Benko’s €24 billion property empire is with German department store Galeria Kaufhof, which filed for bankruptcy protection in October, the people said.
“The writing was on the wall,” said one person close to Mr Benko’s property business, Signa Group.
Stealth sackings: why do employers fire staff for minor misdemeanours?
How much of a threat is Donald Trump to the Irish economy?
MenoPal app offers proactive support to women going through menopause
Ezviz RE4 Plus review: Efficient budget robot cleaner but can suffer from wanderlust under the wrong conditions
In October, Mr Benko was named by prosecutors as a suspect in a long-running corruption investigation in Austria that has ensnared prominent businessmen and politicians. The investigation led to the resignation of the country’s chancellor Sebastian Kurz, a key ally of Mr Benko, in 2021.
Mr Benko’s involvement in the case became public after police raided Signa’s headquarters in Innsbruck.
IT Business Person of the Year Barry Connolly: ‘I never really wanted to work for anyone else’
Barry Connolly, the man who brought Red Bull and Kopparberg cider to Ireland has just been named the Irish Times Business Person of the Year. After graduating from UCD with a degree in business, the Dubliner went on to work in advertising and sales at the Sunday Tribune, before moving into the world of entrepreneurship, where he worked alongside a number of successful brands. In 2016, he launched Fulfil, a range of protein bars which took the Irish market by storm. Last April, he sold the business for a reported €160 million to family-owned confectionery giant Ferrero. In this conversation with Ciaran Hancock, he looks back over his career trajectory, explains why Fulfil has become a hit with consumers and shares his top tips for budding entrepreneurs.
No charges have been made against Signa Group or Mr Benko, and both have denied any wrongdoing in relation to the investigation.
Some of the individuals named in the investigation have privately accused prosecutors of targeting figures close to Austria’s ruling conservative People’s Party for political reasons.
Mr Benko was cleared of wrongdoing in a separate bribery investigation against him and other property developers last month.
Deutsche Bank said it did “not comment on actual or potential client relationships”.
A lawyer for Signa Group said that the company had “no existing loans, no credit business or investment banking business with Deutsche Bank and is not in talks with Deutsche Bank about this”. Deutsche Bank was not the group’s principal bank, he added.
Deutsche Bank has nevertheless provided commercial services to Signa entities in the past and has played a role in helping to advise and finance the group. Deutsche was the joint bookrunner for a $300 million (€279 million) green bond issued by Signa in 2021, for example, and provided banking services to Mr Benko personally.
The bank is believed to have kept Galeria Kaufhof as a client because it judged it would be politically difficult to break ties with Germany’s largest department store chain in the middle of a restructuring, people familiar with the details said.
The move to sever ties with Mr Benko comes as Deutsche Bank seeks to reduce its exposure to clients that might come with reputational risk.
Last year, it ditched Hertha Berlin as a client over the Bundesliga football club’s links to financier Lars Windhorst, after the Financial Times reported that Mr Windhorst was under investigation for potential violations of the country’s banking act.
Mr Windhorst and Hertha Berlin declined to comment.
– Copyright The Financial Times Limited 2023
