The ‘Vacuum Cleaner’ Method: How Signa Allegedly Diverted Investor Funds
Munich, Bavaria, Germany – Munich prosecutors have initiated a wide-ranging investigation into René Benko, the founder of the now-bankrupt Signa Group, and other key Signa managers. The probe, which began in early May, focuses on serious allegations of embezzlement, fraud, and credit fraud, stemming from a systematic diversion of investor funds that was internally referred to as the ‘vacuum cleaner’ method.
René Benko, who has been in investigative custody in Austria since January 2025 following the largest insolvency in the country’s history, is the primary suspect in this unfolding scandal. The investigation, based on internal Signa documents, emails, and witness testimonies obtained by the Süddeutsche Zeitung, paints a picture of a sophisticated scheme to channel money from project-specific investments towards the struggling Signa Group’s central coffers in Austria.
The “Vacuum Cleaner” Unveiled: A System of Fund Diversion
The term ‘vacuum cleaner’ was reportedly coined by Manuel Pirolt, the CFO of Signa Prime Selection AG (SPS AG), the entity that consolidated Benko’s most prestigious real estate assets. According to the investigative report, Pirolt frequently used this term in internal communications, often accompanied by a smiley face, to instruct the immediate transfer of funds. Phrases such as “as soon as the money is there, the vacuum cleaner must immediately pull it to prime please” and “start the vacuum cleaner immediately” illustrate the directive nature of this method.
Investigators allege that the SPS AG acted as this ‘vacuum cleaner,’ absorbing funds intended by investors for specific real estate projects. This money was then allegedly diverted “centrally to Austria” or “basically within Austrian access,” as explicitly stated by Pirolt in his communications to employees.
The Munich Bahnhofplatz Project: A Case Study in Alleged Misappropriation
A central focus of the investigation is the Munich Bahnhofplatz project, involving a 120-million-euro payment from a prominent Munich real estate entrepreneur. Prosecutors suspect that Benko and other Signa officials did not use these funds for their intended project, but rather as a “liquidity component for the Signa Group” and to finance a capital increase. This capital increase was allegedly aimed at acquiring the luxury department store Selfridges in London, during what appears to have been a period of intense acquisition for Benko.
Crucially, it is also suspected that essential information was withheld from Benko’s house bank, Raiffeisen Bank International, regarding the heritage-listed building at Munich Bahnhofplatz, which is now a construction ruin. This forms the basis of the credit fraud allegations.
Withholding Information from the Bank: The Credit Fraud Angle
According to the report, as soon as the 120 million euros were received, approximately 110 million euros were immediately “upstreamed” – moved out of the project group and into the Signa Group, via Signa Development Selection AG (SDS AG) to Signa Holding. Internal communications from controlling staff at the time, such as “The SPS AG and the SDS AG are starting the big vacuum cleaner” and “The vacuum cleaner is back,” indicate awareness of this procedure within the company.
Investigators believe that the funds were never seriously intended for the renovation of the former Hermann Tietz department store at Bahnhofplatz. Furthermore, a later 120-million-euro loan from Raiffeisen Bank International for the old building is under scrutiny. The bank allegedly approved the loan on the assumption that Galeria Karstadt Kaufhof would return as a long-term tenant. However, a witness claims that without a lease agreement, the loan would not have been granted. Galeria, also part of Benko’s empire at the time, closed its main station branch in summer 2023.
Internal Signa documents suggest that during negotiations with Raiffeisen Bank, it was already clear that Galeria would not return to the building, with plans instead to convert it into offices. This information was allegedly “consciously” withheld from the bank, as evidenced by a quote: “First wait for RBI disbursement, no communication about ‘no department store’, René ‘too early’.” This implies an intent to secure the funds from the bank before disclosing the true plans, forming the basis for the credit fraud suspicion.
The Saudi Arabian Connection: Another Instance of the ‘Vacuum Cleaner’
The ‘vacuum cleaner’ method was also allegedly applied to other payments. The Saudi Arabian sovereign wealth fund PIF invested 187 million euros in the “Franz” project, also at Munich Bahnhofplatz, intended for the renovation of a new building on Schützenstraße. However, the pattern repeated: on the same day PIF transferred the 187 million euros in March 2022 to a Signa subsidiary, Signa managers allegedly transferred almost 181 million euros to the parent company SPS AG. The remaining six million euros served as a “cash reserve.” All these actions were reportedly at the behest of Benko, described in the report as the central decision-maker.
Financial Distress and the ‘Beer Mat’ Overview
The Signa Group was reportedly in severe financial difficulties long before the actual insolvency filings at the end of 2023. Pirolt had informed Benko of “massive” financial woes as early as mid-February 2022. Benko regularly requested and received “liquidity overviews,” which he wanted presented concisely, on a “beer mat” – a metaphor for a brief, clear summary of the financial situation. What the ‘vacuum cleaner’ collected was meant to be reflected in black and white on this ‘beer mat’.
While the report’s findings are not yet judicial determinations and Benko, along with all others, benefits from the presumption of innocence, the ongoing investigation by Munich prosecutors suggests a systemic approach to fund management within the Signa Group that could have severe legal repercussions.
