Financially, the Adler Group is not doing well. The real estate group ends the past year with a loss of billions. Now there are also investigations because of questionable balance sheets and consulting contracts. One 175 investigators were searching sites across Europe.
Sensitive setback for ailing real estate investor Adler Group: officials from the Frankfurt Public Prosecutor’s Office and the Federal Criminal Police Office (BKA) have searched offices of subsidiary Adler Real Estate on suspicion of false accounting, market manipulation and breach of trust. A spokesman for the company confirmed the raid at Adler Real Estate.
According to the Frankfurt public prosecutor’s office, a total of 21 properties – including business premises, apartments and a law firm – were searched in Berlin, Düsseldorf, Cologne and Erftstadt, as well as in Austria, the Netherlands, Portugal, Monaco, Luxembourg and the UK. Around 175 officers from the public prosecutor’s office and the BKA were involved.
The public prosecutor’s office said the suspects are German, Austrian and English nationals aged between 38 and 66. They are accused of having misrepresented or aided and abetted the misrepresentation of the company’s financial statements in their capacity as (former) board members from 2018 to 2020.
In addition, they are alleged to have concluded consultancy agreements in the company’s name and instructed payments in return for which, according to the current state of the investigation, no consideration was received. The company is said to have suffered a financial loss as a result.
The suspicion remains that the defendants were making accommodation offers or sham transactions to drive up prices for projects and achieve a favourable “loan to value” (LTV), investigators further explained. They said this sent incorrect signals to the capital market, as LTV is a critical factor in investment decisions and market prices for the group’s shareholders and bondholders. According to the Adler spokesman, no members of the Adler Group’s board of directors are among the suspects. The company is cooperating “fully” with the authorities.
Adler is under pressure on many fronts. Last year, the group had again closed with a loss of billions. Auditors from KPMG had, among other things, refused to certify the 2021 annual financial statements. The turbulence at Adler was also triggered by accusations by Viceroy Research that there were deficiencies in the valuation of properties at Adler. Some of these had been artificially inflated. Adler had rejected Fraser Perring’s accusations. Adler Real Estate has been part of the Adler Group since 2020.