CORRECTION - Market Strategy: Money Laundering Investigation Against SIGNA Dropped

The Vienna public prosecutor has confirmed that it dropped the inquiry against Austria's SIGNA Group, headed by real estate investor Rene Benko, for suspicion of money laundering. "Incriminating behaviour could not be verified," said a spokesperson.

The probe followed a routine check in the wake of funds flowing from a private trust of Rene Benko to a bank in Luxembourg. However, the transaction was documented without fault and the cessation of the investigation should now improve Benko's chances to take over German department store chain Kaufhof.

In early November 2011, Benko made a bid for Kaufhof, which is owned by Germany's retail and wholesale giant Metro Group and employs 20,000 people, offering a price estimated to be around €2.4 billion.

This triggered a bidding war with German-American investor Nicolas Berggruen, who wants to join Kaufhof up with his Karstadt department store chain.

When news of the money laundering investigation against Benko surfaced in November as well, it was greeted with suspicion, given the on-going negotiations with Kaufhof.

Benko himself rejected any impropriety and dismissed the accusations as a smear campaign. Nevertheless, it is widely understood that the allegations led to the delay of the Kaufhof sale.

Benko's exoneration is now expected to put him in pole position in the battle for Kaufhof.

SOURCE Market Strategy