BaFin finds further errors in Adler balance sheets
A good two years ago, Adler came under fire from the British short seller Fraser Perring. He accuses the company of having artificially inflated the valuation of numerous properties. BaFin finds further inconsistencies during a balance sheet audit.
According to findings by the financial supervisory authority BaFin, the real estate group Adler Real Estate has also presented its financial situation in the balance sheets for 2020 and 2021 in a far too rosy light. In addition to inflated valuations for the shaky "Glasmacherviertel" real estate project in Düsseldorf, which the auditors of the German Federal Financial Supervisory Authority (BaFin) had already criticized for 2019, they found that the valuation of the investment in the housing company Accentro was too high. In addition, Adler Real Estate had not noted in the 2021 financial statements that the company had not received any collateral for a controversial €265 million loan to its Luxembourg-based parent company Adler Group.
The balance sheet control proceedings against Adler Real Estate, which lasted more than two years, have thus been concluded, the Bonn authority declared. Since the Wirecard scandal, it has taken over the tasks of the "balance sheet police" DPR for listed companies. The Adler Group emphasized that BaFin had neither demanded a restatement of the balance sheets nor imposed a fine. It still does not share the skepticism about the "Glassmakers' Quarter". Adler considers the valuation - which stood at 270 million euros at the end of 2021 - to be "appropriate and correct". The company is therefore examining whether it will take action against the error finding.
Adler came under fire from British short seller Fraser Perring more than two years ago. He had accused the company of having artificially inflated the valuations of numerous properties. Adler had only found new auditors for its balance sheets with difficulty and after a long search.
Overly optimistic assumptions
According to the auditors' assessment, the Glasmacherviertel was still overvalued by at least 86 million euros in the 2020 balance sheet. Even in 2021, after the reversal of the sale of the project, it was worth less than the 270 million euros it was still valued at in the balance sheet. A residential district is to be built on the site of a former glassworks in the Gerresheim district of Düsseldorf. The BaFin auditors criticized that the assumptions regarding the start of construction and completion of the project were too optimistic, especially as there was no development plan for the site.
The €59 million that Adler Real Estate was entitled to from the sale of the majority stake in Accentro in 2017 should only have been included in the balance sheet with a risk discount, according to BaFin. This is because the buyer of the shares had allowed several payment deadlines to pass after Adler had already transferred the shares to him. Nevertheless, Adler had valued the shares at the market price. Accentro is now 83% owned by financial investor Brookline, which acquired a stake in 2017.
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Source: www.ntv.de
