BERLIN — René Benko, owner of the German Karstadt department store chain and a key bidder for the competing Galeria Kaufhof department store group, is under investigation by the Vienna D.A.’s office for corruption related to the building of his luxury chalet in Lech in Arlberg, Austria.
According to reports in the German and Austrian press, the Austrian real estate investor is being investigated for having made use of “special advantages” when purchasing a rundown mountain inn, where he later built his “Chalet N.” It is being alleged that Benko made a payment of 250,000 euros to the commune of Lech in order to forgo the legal proceedings to determine the existence of pre-emption rights for the site, as well as a second 250,000 euro payment to help speed up the authorization process for his construction project.
Neither spokesmen for the D.A. Office in Vienna, Benko or his real estate holding company, Signa, could be reached for comment.
This is not the first time Benko has come under scrutiny from legal authorities. In 2012, the district court in Vienna sentenced him to a year probation along with his tax accountant for attempting to meddle with a tax affair in Italy. The judge called it a “model case of corruption.”
That sentence, however, did not stand in the way of Benko’s acquisition of the KaDeWe property and 16 other Karstadt department stores in late 2012, nor the full takeover of the Karstadt chain through his Signa Holding in August 2014.
It remains to be seen if this latest investigation will have a bearing on his reported 2.9 billion euro bid in late May for the Metro Group’s 135-door Galeria Kaufhof chain. Hudson’s Bay Co. has also reportedly made a bid for Kaufhof. Metro also was unavailable for comment.