The past won’t let go of the real estate group Adler. For almost a year, the branched company has been dealing with serious allegations from the notorious short seller, Fraser Perring, about dubious real estate deals and bloated balance sheets at the expense of shareholders. The financial regulator Bafin has also been examining the group’s financial statements for months – and has now essentially confirmed one of Perring’s central allegations.
A real estate project in the Gerresheim district of Düsseldorf was included in the balance sheet for 2019 with 375 million euros – a value that “was not representative of the price that could have been received for the sale in an orderly transaction between market participants”, as the Bafin announced on Monday. The “Glasmacherviertel” was overvalued with at least 170 million euros, possibly even with up to 233 million euros.
Although an Adler subsidiary had sold the majority of the project in 2019 for an overall valuation of just those 375 million euros, the deal was reversed a short time later. The deal came about through the mediation of the Austrian businessman Cevdet Caner, the supposed buyer was his brother-in-law.
Caner and a small circle of business partners are also at the center of Perring’s allegations. They are said to have pulled the strings in the nested Adler Group from the background and blinded shareholders and creditors with inflated real estate valuations. Both Adler and Caner have always vehemently denied the allegations. As a result, the group even called in the auditors from KPMG to invalidate them. However, the verdict was disappointing for the company, KPMG did not feel able to dispel all doubts, also with regard to the project in Gerresheim: The accusation that the price for the area was exaggerated “cannot be refuted,” says the report . Now the Bafin even officially confirms it.
And that may not have been all, the 2019 financial statements are still under review, and the same applies to the 2020 and 2021 financial statements, according to supervisors. In a first reaction, the parent company Adler Group announced that it would appeal against the Bafin decision. It is believed that the audited financial statements for 2019 have been correctly and properly prepared. The Adler share, which is listed in the S-Dax, nevertheless fell to a new record low of 3.25 euros – within one year the loss is almost 85 percent.