Ruling nears in Austrian fraud trial of property tycoon Benko

The insolvency-related fraud trial of fallen Austrian property tycoon Rene Benko entered its second day on Wednesday, with a ruling expected in the afternoon in the first case connected to the collapse of his Signa property empire.

Signa became the biggest casualty of Europe's property downturn when some of its main units filed for insolvency in 2023. Prosecutors are conducting a sprawling investigation into possible crimes committed, and estimate the related damage caused at around 300 million euros ($349 million).

The case being heard in Benko's home city of Innsbruck this week deals with just a fraction of that sum - about 660,000 euros in total which prosecutors allege Benko diverted in an attempt to keep the money beyond the reach of creditors in the context of his insolvency as an entrepreneur.

Benko has pleaded not guilty and his lawyer Norbert Wess told the court the accusation was "absurd". Benko faces up to 10 years in prison if convicted.

The case centres on two lump sums including up-front rent and other payments of around 360,000 euros in 2023, the year major Signa units filed for insolvency, for a house in Innsbruck that prosecutors argue made no sense because the property was in need of repair and uninhabitable at the time.

The remaining 300,000 euros were ostensibly a gift to his mother, prosecutors said.

His lawyer Wess said there was nothing improper about the payments and that Benko moved into the house with his family sooner than prosecutors alleged.

With only a handful of witnesses due to be heard, a ruling was likely to be issued later on Wednesday. It is the first of two cases prosecutors have brought against Benko so far.

($1 = 0.8598 euros)

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