Real estate group Vonovia: Systematic bribes?

According to research by WDR and SZ suspected that a criminal gang had been operating there for years. Two Vonovia employees are said to have collected donations worth around half a million euros.

The public prosecutor’s office in Bochum received the first clues in winter 2021. An anonymous letter put the investigators on the trail of Germany’s largest real estate group Vonovia. The more the investigators found out, the more the picture of a suspected bribery system that is said to have operated in the middle of the Dax group for years became apparent. After research by WDR and “Süddeutsche Zeitung” (SZ) there is a suspicion that a criminal gang has formed in the housing group. During the raid on Tuesday, the police took four suspects into custody.

According to information from WDR and SZ two Vonovia employees from middle management who are said to have accepted donations totaling around half a million euros since 2011. In return, they are said to have given construction and trade companies orders worth millions.

In addition to cash, the accused are said to have been receptive to benefits in kind. Sometimes a gas grill, sometimes a solar system, sometimes the bill from the hardware store or for the gardener. For their part, the commissioned companies are suspected of having bribed Vonovia employees and benefited from the alleged system of corruption with excessive prices. A building technology company is said to have billed services using bogus invoices that it did not even provide.

Numerous traces

Overall, the public prosecutor’s office in Bochum, the State Criminal Police Office in Düsseldorf and several financial authorities are investigating more than 20 suspects. The number could increase significantly as the investigation progresses. According to authorities, numerous leads are being followed.

After the investigators arrived at Vonovia’s Bochum headquarters on Tuesday, the company was alarmed. You are the victim yourself in this case. CEO Rolf Buch explained: “We are shocked. Apparently, individual employees at our subsidiaries allowed themselves to be bribed to the detriment of Vonovia.” That is “not acceptable.”

Vonovia has commissioned the auditing company Deloitte to conduct an independent audit of the processes and has already taken the first personnel measures. The Dax group, which owns more than 549,000 apartments across Europe with a portfolio value of almost 100 billion euros, is under pressure. After the raid became known on Tuesday, the share price fell by up to five percent.

Undiscovered for more than ten years

Management and the board of directors will have to ask themselves the awkward question of how a suspected system of corruption could have gone undetected for more than ten years. After all, the group has committed itself to a compliance system. Rules that are intended to prevent precisely such machinations and violations of the law. Upon request, Vonovia explains that the compliance system is “absolutely state-of-the-art” and is checked regularly. “But even the best compliance system cannot prevent people with criminal tendencies from circumventing such a system.”

According to authorities, the question of whether Vonovia is actually the only victim in the case has yet to be determined. After all, modernization measures are often passed on to the tenants. At this point in time, the Group cannot rule out the possibility that Vonovia tenants may also have had to pay for services that were excessive or, in the worst case, not provided.

“According to the current state of knowledge, this is a financial loss that was incurred at the expense of Vonovia as the client. It is about bills of quantities that were billed to the company, not to Vonovia’s tenants. To what extent these are cost items, which were also partly passed on in the subsequent processes is the subject of the investigations,” explained a spokeswoman.