Signa Bonds Drop as Austrian Prosecutors Search Office in Probe

Marton Eder and Laura Benitez
·1 min read
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(Bloomberg) -- Bonds of Signa Development Selection AG slumped to the lowest on record after Austrian prosecutors searched the offices of billionaire Rene Benko’s holding company over corruption allegations.

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The real-estate developer’s €300 million notes ($295 million) due 2026 fell almost 3 cents on the euro to 55.7 cents on Tuesday, according to data compiled by Bloomberg.

Prosecutors raided the office of parent company Signa Holding on Tuesday, Die Presse newspaper said without citing anyone. The authority confirmed on it searched the premises of two companies as part of an investigation into bribery and illegal party funding without identifying them.

Rene Benko didn’t respond to an email seeking comment.

The raid on Signa is part of a broader investigation around Thomas Schmid, a former head of Austria’s state holding company and erstwhile general director at the Finance Ministry.

Schmid has sought crown witness status in the wide-ranging corruption probe that started in 2019 after a video showed a top cabinet member discussing party financing matters in the Spanish resort of Ibiza. His phone was seized by authorities, revealing thousands of text messages he’d exchanged with every echelon of government and business in Austria.

Former Chancellor Sebastian Kurz stepped down last year amid allegations he misused taxpayer funds to plant fabricated public opinion polls in the country’s largest tabloid newspaper, helping his rise to power. Kurz has denied any wrongdoing.

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