At the beginning of September, krone.at reported for the first time about violations of the corporate code by Signa managers: Large companies from the conglomerate of financial juggler René Benko had often not submitted annual accounts to the commercial register court for years and kept secret from the public what the actual status of the company in question.
Which results in fines against the defaulting directors (in the case of a GmbH) or board members (in the case of an AG). Depending on the size of the company, between 700 and 3,600 euros are due every two months. Per company. And per director or board of directors.
Own internal process
Now ignoring the regulations appears to be a well-organized violation of the law: “News” reports this in its current issue, citing internal documents. Accordingly, René Benko’s Signa Group has deliberately, systematically and for years violated legal publication obligations. To deal with the mandatory fines imposed, Signa even set up its own internal process to financially compensate the managers who had to pay these fines privately. Accounting, auditing and human resources would have been involved. Particularly noteworthy: the fines were paid out as benefits in kind and deducted from taxes.
In an internal Signa email (photo below) from December 2021, which went to numerous key directors of the opaque Benko construct, a department head set out a nine-point process. They even set up their own accounts. The message begins with the following: “This year we have noticed the mandatory corporate book fines, which we were not aware of until now. We have developed a process so that these are correctly recorded in the payroll and tax accounting and so that the director himself is not left with the costs (…)”
High fines accepted
Apparently the financially ailing Benko Group has spared no effort to withhold the true picture of the state of numerous Signa companies from the public. And the legislature was apparently unaware that the current legal situation could be exploited by speculators like Benko, because it does not provide for an indefinite penalty framework. According to ‘News’, the billion-dollar company Signa recently accepted fines of up to a quarter of a million euros.
What did Benko know, who has not formally been a director or board member for ten years, but who actually determined everything? In an email that was also sent to Benko, a director writes: “…I received information today from RB (René Benk, note) that the annual accounts for 2018 and 2019 may not be submitted for the time being.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
