2023-07-08 22:01:07
In the consolidated balance sheets of two Signa companies of the Tyrolean real estate investor Rene Benko, “adjustments to incorrect previous year’s figures” were made in 2020. Meanwhile, the ECB should check banks purely for their business relationships with and lending to Signa. Both emerge from media reports.
In Signa Development, EUR 161 million was subsequently reclassified to financial liabilities. In the Signa Prime Selection, 496 and 763 million euros were regrouped into financial liabilities, writes “Der Standard”. Signa speaks of a technical adjustment to IFRS accounting rules.
Signa: “Technical reclassification”
The auditor KPMG states in its statements in the balance sheets that the so-called covenants, i.e. contractually binding assurances by the borrower, were of course complied with. The company said on request according to “Standard”: “These adjustments are due to the accounting guidelines of IFRS (International Financial and Reporting Standards, note) – it is just a more detailed reporting issue – so a technical reclassification.”
According to Signa, all points were disclosed in detail in several places in the “Notes”. “The facts were properly rearranged, presented and explained.” Signa emphasized that no further reclassifications were necessary in the years that followed. For example, the German department store giant Galeria Kaufhof belongs to Signa Prime. In Austria, Signa did not get out of the headlines in the wake of the Kika/Leiner insolvency. This came shortly following Signa sold the furniture retail chain.
According to the published balance sheets for 2020, the two main parts of the Signa Group will have to repay around 3.7 billion euros in liabilities and pay 800 million euros in interest from 2022 to 2025. According to “Standard”, almost 8.2 billion euros in bank liabilities are secured in the land register.
According to the management consultancy “Finanzombudsteam” in the report, it is clear that massive increases in rental income and the increase in value of the properties were needed to close the gap between the cash flow in 2020 and the loan repayments reported in the future. Banks are accepting a concentration of risk here, while it is becoming increasingly difficult for SMEs to obtain credit, the managing director Gerald Zmuegg is quoted as saying by the newspaper.
ECB to review bank loans to Signa
The “Presse” reported, however, with reference to an article in the “Frankfurter Allgemeine Zeitung”, that the European Central Bank (ECB) was for the first time examining banks for only one borrower – Benko’s Signa Group. A team of bank supervisors – mostly Austrians – is examining European banks for this selected borrower. “It’s never happened before,” the German newspaper quoted a long-standing bank director who wished to remain anonymous.
Accordingly, all banks that have business relationships with Signa are included in the on-site inspection: state banks, special real estate banks, German and Austrian finance houses. According to “Presse”, the bank supervisors should know the amount of Benko loans per institute, even if the Signa empire is branched. Under the Signa parent company (holding company), two-thirds of which belongs to the Benko family foundation, there are three separate companies, one of which also includes the Galeria Karstadt Kaufhof department store chain. This has received immense state aid in Germany.
The investigative team is collecting data on whether Signa Group lenders have complied with lending standards. They also question the loan collateral and check whether all interest payments have been made and whether the financial covenants agreed in the loan agreement have been complied with or possibly broken. These examinations usually last six to eight weeks.
The ECB itself did not confirm the report. According to the press, Signa did not want to comment on this. However, companies are never informed regarding any bank audits by the ECB.
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