René Benko Business Scandal: Abu Dhabi's Ruling Family Demands Millions Back

PeopleOther ♦ Published: May 14, 2024; 12:28 ♦ (Vindobona)

The ruling family of Abu Dhabi, led by Crown Prince Mohamed bin Zayed al Nahyan, is demanding the return of 250 million euros from René Benko via the International Court of Arbitration (ICC) in Paris.

René Benko with the then Chancellor Sebastian Kurz at an audience with Crown Prince Mohammed bin Zayed Al Nahyan in Abu Dhabi. / Picture: © Bundeskanzleramt (BKA) / Dragan Tatic

According to the news magazine Spiegel, the family lent the now insolvent real estate investor this sum from their private assets, in part as late as 2023, when the financial difficulties of his company Signa were already becoming apparent. Benko's lawyer, Till Dunckel, dismissed the report as a falsehood without providing further details.

The dispute is not just about financial losses, as reported by DiePresse. An insider of the Nahyan family emphasized that they are less concerned with the money than with their honor. The family does not want to be seen as gullible people who allow themselves to be duped. The family felt that the route via the Austrian courts was not promising and would take too long, which is why they turned to the ICC in Paris.

Signa's mountain of debt and the role of the state fund Mubadala

The 250 million euros from the Nahyan family's private assets are in addition to the existing claims of 713 million euros asserted against Signa and Benko by Abu Dhabi's sovereign wealth fund, Mubadala. Mubadala had invested around EUR 323 million in Signa in January 2019 and a further EUR 175 million in August 2021. The fund is now demanding the return of the entire invested capital plus interest, as reported by the Kleine Zeitung newspaper.

The pressure on Benko is increasing. The ruling family has allegedly sent out an "armada of people" to collect the money from Benko. This claim that Benko had to get bodyguards was made by the German weekly newspaper Spiegel and illustrates the tense situation. However, a person familiar with the matter in Abu Dhabi pointed out that this was not the usual tone of the royal family.

Is Benko jeopardizing relations between Austria and Abu Dhabi?

Former Federal Chancellor Sebastian Kurz had always maintained good relations with Crown Prince Mohamed bin Zayed al Nahyan and even gave a Lipizzaner stallion to his daughter as a gift in March 2019. Such symbolic gestures illustrate the close relationship between Austria and Abu Dhabi, which could now be put to the test by Benko's financial difficulties, as reported by DiePresse.

Abu Dhabi, the richest emirate in the United Arab Emirates, has had close economic ties with Austria and its companies, such as the OMV subsidiary Borealis, for many years. However, the Signa insolvency and the money lost as a result could put a strain on these relationships. The Nahyan family, which has assets estimated at 280 billion euros, not only invests in shares in energy and tech companies but also in projects such as soccer clubs and fashion brands.

A fragile balancing act

The pressure on René Benko, the former top manager and founder of the Signa Group, is increasing. Several lawsuits are already underway against the company's top management, and now the royal family of Abu Dhabi is also demanding its invested money back. The former business partners feel cheated and are demanding their money. A confidant said, as reported by "DiePresse", that the sheiks are more concerned with the principle than the money.

Benko's situation is becoming increasingly difficult as he has to find the lost money. The ICC in Paris is to decide on the claims, with the accusation that Benko asked for more money when Signa's insolvency was already foreseeable. A quick arbitration ruling in Paris could further increase the pressure on Benko and put relations between Austria and Abu Dhabi to the test.

The future of relations between Austria and Abu Dhabi

The close economic cooperation between Austria and Abu Dhabi could be jeopardized by the scandal surrounding René Benko. Although Austria continues to strive to maintain good relations with the rich emirate, the loss of millions of euros and the associated breach of trust could have long-term consequences. How this situation develops will not only affect Benko's future but also diplomatic and economic relations between the two countries.