FirstFT: Deutsche cuts ties with Selfridges co-owner René Benko

Deutsche Bank has cut ties with Austrian real estate billionaire René Benko, one of Europe’s most successful property developers, over concerns about his involvement in a sprawling corruption investigation.

Germany’s biggest lender decided late last year to end its business relationship with Benko, who co-owns Selfridges in London, the Chrysler Building in New York and German department store KaDeWe, according to three people with close knowledge of Benko’s financial affairs.

The only banking relationship Deutsche has retained with Benko’s €24bn property empire is with German department store Galeria Kaufhof, which filed for bankruptcy protection in October, the people said.

In October, Benko was named by prosecutors as a suspect in a long-running corruption investigation in Austria that has ensnared prominent businessmen and politicians. The probe led to the resignation of the country’s chancellor Sebastian Kurz, a key ally of Benko, in 2021.

Benko’s involvement in the case became public after police raided the offices of his property business Signa Group in Innsbruck.

No charges have been made against Signa Group or Benko, and both have denied any wrongdoing in relation to the investigation. Benko was cleared of wrongdoing in a separate bribery probe against him and other property developers last month.

Deutsche Bank said it did “not comment on actual or potential client relationships”.

Five more stories in the news

1. Ukraine claims Russia using balloons as ‘fake targets’ Kyiv has accused Moscow of launching balloons as distractions to trick Ukraine’s air defences into firing surface-to-air missiles and exhausting valuable supplies. Meanwhile, western intelligence shows Russia is amassing aircraft close to the border with Ukraine.

2. Strong dollar fuels emerging market devaluations Egypt, Pakistan and Lebanon all abandoned longstanding policies of pegging their currencies to the dollar last month to avoid spending precious foreign reserves supporting their exchange rates. With the US currency remaining historically strong, economists and investors warn more emerging and frontier markets may be forced to follow suit.

3. US inflation cools slightly The US consumer price index rose at a rate of 6.4 per cent in January compared with a year earlier, a smaller decline than expected. The data heightens concerns about the persistence of high inflation in the US economy and the possibility of the central bank raising rates for a longer period.

4. Ireland scraps residency-for-investment scheme Ireland has abruptly shut down its decade-old Immigrant Investor Programme, which offered residency in exchange for investment from rich global — especially Chinese — citizens. The closure comes after EU criticism of such schemes and international scrutiny of China for suspected balloon espionage. The scheme has netted almost €1.25bn since it started in 2012.

5. BBC’s India offices raided after Modi documentary Tax officials in India have searched BBC news bureaus in the country’s two largest cities, weeks after the broadcaster aired reports critical of Indian prime minister Narendra Modi. The two-part documentary raised questions about Modi’s actions during deadly religious riots in Gujarat when he was the state’s top official.

The days ahead

Economic data The UK publishes its January consumer and producer price indices, while Spain and South Africa have consumer price inflation for the same month. The EU releases trade balance figures for December, while Norway has the same figures for January.

ECB chief speaks Christine Lagarde will take part in a plenary debate on the European Central Bank’s annual report at the EU parliament in Strasbourg today.

Oil report The International Energy Agency publishes its oil market report.

1MDB scandal Former Goldman Sachs partner Tim Leissner is due to be sentenced in a federal court in New York, where he pleaded guilty to corruption charges for his role in helping loot billions from Malaysia’s 1MDB development fund.

Corporate earnings Barclays, which is being probed by the UK financial regulator over its compliance and anti-money laundering systems, releases its annual earnings today. Cisco Systems, Glencore, Hargreaves Lansdown, Heineken, Kering, Kraft Heinz and Krispy Kreme also report.

What else we’re reading

‘Big Bang 2.0’: Reviving the City of London Ministers and financiers hope a series of proposals to loosen EU-derived rules can be a blueprint for the post-Brexit era, and there is political pressure to show that leaving the EU has brought benefits. But can the reforms make London more competitive against rival financial capitals?

Opinion: New interventionism could threaten global trade Security concerns are driving the fashion for active industrial policy, but there are potential downsides, writes Martin Wolf. In practice, it is quite difficult to make such interventionism work, and while fragmentation is very easy to start, it will be hard to control and even harder to reverse.

Syrians left to fend for themselves after quake The international community responded immediately to the devastating February 6 earthquake by sending hundreds of millions of dollars in supplies and rescue teams to disaster-hit southern Turkey. But in the rebel-held Syrian town of Jinderes, no international aid arrived for nearly a week, leaving shell-shocked victims to fend for themselves.

Opinion: How the temperature of US politics came down President Joe Biden has been focusing on politically ambiguous policies that Republicans find hard to oppose, including an infrastructure spree and industrial subsidies, Janan Ganesh writes. China has provided a unifying external rival. Is the US learning to live with division?

Opinion: A war for climate talent is hotting up With new rules on greenwashing and environmental risk on the horizon, competition for green business experts is growing. Financial companies are snapping up staff from environmental non-profit groups at a pace — and price — that industry veterans say is striking, writes Pilita Clark.

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Take a break from the news

It is not easy to get changed outside for a swim in a Scottish loch. Especially when it is January, the air temperature is hovering around -1C and you are trying to preserve some shred of modesty among the strangers who surround you. “This bare-cheeked frozen misery marked the start of one of the best weekends of my life,” writes Isabel Berwick, who shares why interest in ice swimming is heating up.