INNSBRUCK, Austria (Reuters) -Austrian former billionaire Rene Benko goes on trial on Tuesday in the first case tackling the collapse of his property group Signa, which at its peak acquired stakes in New York's Chrysler Building and the British department-store chain Selfridges.

Signa became the biggest casualty of Europe's property downturn when some of its main units filed for insolvency in 2023. Prosecutors are conducting a sprawling investigation into possible crimes committed, and estimate the related damage caused at around 300 million euros ($348 million).

Benko has previously denied allegations made against him. His lawyer has not responded to requests for comment.

Tuesday's trial is the first of two cases prosecutors have filed against Benko so far, accusing him of insolvency-related fraud accounting for a tiny fraction of the estimated damages.

However, the charge he faces this week alone carries a sentence of up to 10 years in prison.

It is due to be Benko's first public appearance since the 48-year-old was arrested in January, since when has remained in custody.

This week's trial, scheduled for Tuesday and Wednesday, centres on whether roughly 660,000 euros in payments and transfers were attempts by Benko to keep that money out of creditors' hands or reduce their compensation.

Just over half that amount, roughly 360,000 euros, was rent and related up-front expense payments for a house that were "economically and fundamentally unjustifiable", the Central Prosecutors' Office for Economic Crimes and Corruption (WKStA) said in its statement bringing the case.

The remaining 300,000 euros were ostensibly a gift to relatives, the WKStA said. The office did not provide details on who had made the various payments and to whom.

Signa's collapse is Austria's biggest bankruptcy and a spectacular fall from grace for Benko, who built Signa from the ground up, expanding into Germany, Switzerland and beyond on the back of ultra-low borrowing costs, until the surge in inflation and then interest rates after Russia invaded Ukraine.

Signa's creditors, which include blue-chip companies like Deutsche Bank, Allianz, Julius Baer and Raiffeisen Bank International, have filed billions of euros in claims against the group since its collapse.

($1 = 0.8626 euros)