VIENNA, April 16 (Reuters) - Austrian prosecutors said on Thursday they had placed Austria's former Chancellor Alfred Gusenbauer under investigation on suspicion of breach of trust during his time as
Austrian Ex-Chancellor Investigated in Expanding Signa Bankruptcy Case
Investigation Details and Implications
Background of the Signa Group and Its Collapse
VIENNA, April 16 (Reuters) - Austrian prosecutors said on Thursday they had placed Austria's former Chancellor Alfred Gusenbauer under investigation on suspicion of breach of trust during his time as a senior executive at the now-collapsed property group Signa.
At its peak, Signa controlled all or part of luxury properties including five-star hotels in Venice and Vienna and the Chrysler building in New York, as well as high-end department-store chains such as Britain's Selfridges and Switzerland's Globus. Its founder Rene Benko became a self-made billionaire.
Signa's collapse, which began with insolvency filings in late 2023, is the biggest bankruptcy in Austria's history and burned investors including blue-chip companies in neighbouring Germany and Switzerland.
Scope of the Investigation
As part of a sprawling investigation into suspected crimes including fraud and breach of trust linked to Signa's collapse and involving more than a dozen suspects, the Central Prosecutors' Office for Economic Crimes and Corruption (WKStA) named Gusenbauer on Thursday as its latest suspect.
Allegations Against Alfred Gusenbauer
"Alfred Gusenbauer is alleged to have abused his position as chairman of the supervisory board of Signa Development Selection AG and Signa Prime Selection AG in October and November 2022 and thereby have caused losses to the two companies totalling 10 million euros ($11.8 million)," the WKStA said in a statement.
Gusenbauer’s Response and Background
Gusenbauer, a former leader of the Social Democrats, served as Austrian chancellor from January 2007 until December 2008. He has previously denied any wrongdoing related to his employment at two of Signa's most important units but could not immediately be reached on Thursday.
Details of the Alleged Illegal Payments
The WKStA said he was suspected of ordering an "unjustified" advance payment from a profit-sharing agreement to another supervisory board member at each company, whom it did not name, acting in agreement with that person. The payments were illegal because they required the entire board's approval, it added.
Wider Impact and Ongoing Proceedings
Raids were carried out and documents and data storage devices seized at several addresses in Vienna and the surrounding state in connection with the case, the WKStA said.
The total estimated damage caused in all crimes under investigation related to Signa's collapse has now risen to more than 1.5 billion euros, it added.
Legal Proceedings Against Rene Benko
Only two criminal cases have been brought to court so far, and Benko was a defendant in both. He was convicted of insolvency-related fraud in both cases, and is appealing both rulings.
($1 = 0.8492 euros)
(Reporting by Francois Murphy. Editing by Mark Potter)
