Two entities under Austrian investor René Benko's Signa umbrella, Signa Financial Services GmbH and Signa REM Germany Rent GmbH, have sought insolvency protection in Frankfurt and Munich respectively. Torsten Martini was appointed as the provisional insolvency administrator in both cases. The two companies joined a growing list of potential insolvency candidates within the Signa group, which has been grappling with significant financial challenges.
The Signa group, with its extensive network of companies, has been plagued by debt and liquidity issues. Questionable transfers of value and inadequate planning have raised eyebrows. For instance, €252 million was transferred to Signa Prime Holding GmbH amidst its financial struggles, a move that now faces investigation.
Public prosecutors in Austria, Germany, and Italy are investigating René Benko for alleged fraudulent bankruptcy and money laundering. His company's management and supervisory board members are personally liable for damages resulting from inadequate planning or delays in insolvency filings.
Following bankruptcy, Signa Prime & Signa Development are seeking €350 million to restructure the group, with plans to issue new profit participation securities as a financial boost.
Signa Holding's financial woes have been a recurring theme, leading to a surge of insolvency cases within the group. In February 2024, Signa Prime Selection GmbH, a key subsidiary, was placed in receivership. Most of Signa's assets, including Signa Sport United in the USA and Kaufhof in Germany/Austria, are being sold or placed in receivership.
René Benko's arrest in January 2025 for attempting to hide Signa Holding assets from investigators further escalated the situation. The investigations against Benko include allegations of unlawfully transferring portions of his wealth to evade legal obligations and fraud connected to state aid received during the COVID-19 pandemic.
Creditors are seeking to recover approximately EUR2.4 billion from Benko, whose Signa Group once had an extensive portfolio, including ownership of renowned German department store chains like KaDeWe and Galeria.
The Signa Group's cash flow planning issues included "beer mat calculations" instead of reliable liquidity overviews, with arbitrary and unjustified transfers of value, uncertain assumptions, lack of transparency, and missing worst-case scenarios. These issues combined with the inadmissible use of funds have further complicated the company's financial struggles.
Insolvency proceedings can result in severe consequences, including criminal investigations, reputational damage, and reclaimed remuneration for members of the Management Board and Supervisory Board.
In conclusion, the Signa group is undergoing a challenging period due to its financial struggles and insolvency cases. The founder, René Benko, is under intense investigation for alleged fraudulent bankruptcy and money laundering. The lack of transparent cash flow planning and inadmissible use of funds have contributed to the company's financial troubles, leading to personal and professional consequences for those involved.
