Gusenbauer, Riess & Co

What the Signa Supervisory Board Members Overlooked

Signa bigwigs in a festive mood: Alfred Gusenbauer and Susanne Riess-Hahn at a Benko celebration in 2017(Bild: Andreas Tischler)

Former Chancellor Alfred Gusenbauer, former Vice-Chancellor Susanne Riess-Hahn, and other prominent supervisory board members, such as former Raiffeisen Bank International CEO Karl Sevelda, had a legal obligation to meticulously monitor the executive boards within the Benko empire. Nevertheless, systematic violations of the law occurred.

When Alfred Gusenbauer had to fight on Wednesday before the Vienna Commercial Court against the repayment of a fraction of his multi-million-euro Signa fees, he emphasized almost like a mantra that, as chairman of the supervisory board of Signa Prime and Signa Development Selection AG, he had always adhered to all legal regulations.

By then at the latest—even before the house searches at the former SPÖ chancellor’s residences, which took place the following day—close observers began to harbor their first doubts. After all, the “Krone” had already reported years ago that René Benko’s million-dollar advisor, Alfred Gusenbauer, had convened a supervisory board meeting at the posh Benko Chalet N back in 2014—a meeting that lasted a mere ten minutes. How thoroughly can one examine the operations of a billion-dollar conglomerate in ten minutes—a company that, ten years later, would suffer the biggest bankruptcy in post-war European history?

’sdeliberate lack of transparencyThe fact is: Signa was a conglomerate deliberately kept opaque, where regulations were routinely violated and laws were systematically broken. Under the obviously completely inadequate oversight of Alfred Gusenbauer, Susanne Riess-Hahn, and prominent former bankers such as Karl Sevelda (Raiffeisen Bank International).

Billionaire bankrupt Rene Benko(Bild: Christof Birbaumer)

What could or should Benko’s Signa executives have noticed?
Lack of a consolidated balance sheet: Benko’s Signa Group went to tremendous lengths to avoid the so-called consolidation of the corporate group. A conglomerate like Signa should actually have prepared a consolidated financial statement showing at least the most important financial metrics. In fact, with the help of the tax consulting firm TPA—which is said to have pocketed around 100 million euros in fees from the Signa Group over the years—a strategy was developed to circumvent this obligation to prepare a consolidated balance sheet. As early as 2018, a confidential document from TPA to Signa stated: “The aim of our recommendations is to avoid a consolidation requirement for Signa Holding with regard to the groups Signa Prime Selection AG, Signa Development Selection AG, and Signa Retail GmbH.” In fact, Benko’s associates now state on the record that he was the mastermind and ruler of the entire group. Yet precisely that—the unified management of the group under René Benko—would have been a key factor requiring consolidation.

Missing annual financial statements: The Signa Group apparently also wanted to prevent an external consolidated assessment. For years, Signa deliberately and unlawfully failed to publish the annual financial statements of its key group companies in the commercial register. These legal violations resulted in ongoing fines for the respective board members and managing directors. What happened at Signa under the supervision of Gusenbauer, Riess-Hahn, and Co.: The respective heads of the companies passed these fines back to Signa, which reimbursed them. And Signa, in turn, deducted these fines from its taxes as business expenses.

Millions Shuffled Aroundat Signa The fact is: Under the supervision of prominent, highly paid advisory and supervisory board members, Signa founder Rene Benko—who had already been convicted in 2013—was able to create a system of opacity. The Signa Group collected billions in investor funds; even small investors were indirectly and severely harmed. It was this opaque and illegal system that made the transfer of millions within the group possible—transfers that are now at the center of the investigation by the Public Prosecutor’s Office for Economic Affairs and Corruption (WKStA). And which have led to claims totaling billions by the receivers against Gusenbauer, Riess, and Co.

Observers assume that “a bankruptcy involving billions in damages would not have been possible without these systematic violations of the law.”

Alfred Gusenbauer stated at his trial on April 15 before the Vienna Commercial Court that he had been something of a “figurehead for Signa.” In other words: He had been intensively involved in public relations and—among other things—had arranged meetings with a former governor of the National Bank and a former head of the Financial Market Authority. As chairman of the supervisory board of Signa Prime and Signa Development, however, the well-connected former chancellor should have focused on “overseeing the executive board” and ensuring compliance with the law in the companies under his control. That is exactly what the law stipulates.