Rene Benko, who founded the property group Signa, has been arrested at his villa in Innsbruck, Austrian prosecutors said Thursday.

The company became the biggest casualty of Europe's property downturn, with creditors seeking to recover what they can since it declared insolvency.

What has Benko been accused of?

"The prosecutor's office in charge of economic crimes and corruption ordered the arrest of Signa founder Rene Benko," a statement from the prosecutor's office said.

It said the arrest was on suspicion of falsifying an invoice and trying to hide assets from creditors.

Benko's Signa Holding filed for bankruptcy at the end of 2023. Among Signa's German assets was the department store chain Galeria.

The Economic and Corruption Prosecutor's Office announced that there was "strong suspicion" of several criminal offenses.

Benko was said to be the "de facto ruler and beneficial owner" of a private foundation and to have concealed this amid his personal bankruptcy. In doing so, he allegedly concealed assets.

Benko also facing Italian arrest warrant

The complex corporate structure that Benko had established collapsed under the pressure of rising interest rates, energy prices and construction costs.

Claims against Benko amount to some €2.4 billion ($2.5 billion), according to the insolvency administrator.

The 47-year-old is also being investigated for alleged fraud regarding state coronavirus pandemic funds, with the focus on aid funds for the luxurious Chalet N in the Austrian ski resort of Lech am Arlberg. 

Benko was questioned last month by Austrian authorities in Innsbruck after an Italian court ordered an arrest warrant against him and several others. This was linked by media to a wide-ranging corruption probe.

As well as several other prestigious department store chains in Europe, Signa's portfolio includes the famous Chrysler Building in New York.

rc/nm (dpa, AFP, Reuters)