Is Germany the scene of a new accounting fraud? Adler has been targeted since this fall by short sellers, including the now famous Fraser Perring, who won big in the Wirecard, Steinhoff and Grenke scandals. He and others suspect the property owner of rigging his accounts. Adler published its 2021 financial results on Saturday, from which it appears that the group, one of the largest in the sector in Germany, suffered a loss of 1.24 billion euros last year… Finally, according to its own assertions. The Stock Exchange fears that the reality is much worse, since Adler’s auditor, KPMG, refused to certify the accounts.
“The auditor was unable to obtain sufficient appropriate audit evidence to provide an audit opinion on these annual accounts” which, moreover, were published late, the time for KPMG to investigate Fraser Perring’s accusations.
“Inflated to a significant degree”
Last October, Viceroy Research, which is owned by the short seller, claimed that the “Adler Group’s balance sheet has been artificially inflated to a significant degree. » Allegations that KPMG did not completely refute when the firm issued its findings recently. It uncovered compliance and governance flaws, but no systematic fraud.
The accusations, which relate to the poor accounting of depreciations in the Consus activity, of real estate development, have not been refuted by KPMG. Last year, Adler took a goodwill loss of 1.08 billion euros in this division, blaming inflation in the construction sector and bottlenecks in the supply chain. procurement, which forced it to revise its assumptions on the probable profitability of its development projects.
On the stock market, Adler plunged another 46% today, its shares falling to a new historic low of 3.88 euros (-65% since the start of the year, after -63% in 2021, -92% since the summer 2018 record).
This weekend, Adler’s board tendered its resignation.