The scandalous group Adler: No Questions, No Answer – Economy

After exactly 20 minutes and 20 seconds, it’s over. The management of the scandalous development group Adler read its statements via a video stream. This ends the virtual general meeting. Fraud allegations, trouble with auditors, panic among investors – was there anything? “As planned”, the statement by the Luxembourg-based group merely stated that shareholders had confirmed the board of directors and adopted all proposed resolutions.

Not a word about the debate. There was also. All questions to the head of the board, Stefan Kirsten, and his people had to be submitted a few days ago and were answered in writing. The document is only four pages long and has a total of eight points.

It would be enough to talk about it: Adler’s share, in part S-Dax, is plunging back to a record low again, the S&P rating agency now classifies every investment in the group as “extremely speculative”, creditors now prefer to sell bonds at a large loss rather than continue living with Adler risk, auditors from KPMG first refused to certify the last balance sheet, and then the group continued cooperation, and the financial regulator Bafin now also wants the 2021 balance sheet of the German subsidiary Czek Adler Real Estate for dirty business.

More real estate sales are approaching

The problems do not end with the billing, but at the construction sites: many of the new construction projects from the Consus subsidiary have apparently practically died out. In Hamburg, Berlin and Düsseldorf, huge areas have been idle for years, promised apartments are not finished, municipalities and investors are discouraged, and craftsmen are not being paid, according to NDR research.

But Adler is silent about this.

“Our goal is to fully restore confidence,” says Kirsten. The target for the current year is still an unconditionally confirmed balance sheet. However, it is unclear who should test this. Only at the very end does Kirsten admit that Adler will likely have to consider selling other properties to service any liabilities. Of what used to be around 70,000 apartments, only a good 27,000 are still owned by the group.

Adler barely manages to rebuild his confidence after serious allegations

The well-known short seller Fraser Perring has started a crisis. A report released by his analyst firm Viceroy in October last year contains serious allegations: there is talk of overvalued real estate and secret transactions in the company’s network. According to Perring, the beneficiary is a network centered around Austrian businessman Cevdet Caner, which would harm shareholders and creditors.

Adler and Caner have always denied this, but investors believed the Briton – although he is by no means a neutral expert, but he makes money by betting falling prices. As a result, Adler felt compelled to entrust KPMG with a special review of the allegations and to include real estate expert Stefan Kirsten in the group as the new strongman.

On the very first day, he promised absolute openness and transparency. “Confidence building” has since become part of his mantra. Only: it doesn’t quite work.

For example, KPMG’s auditors were unable to counter the allegations – largely because the group retained around 800,000. documents requested for verification. Kirsten justified this with legal issues and an obligation of confidentiality. An argument many observers could not quite follow.

And even in the run-up to the annual general meeting, one thing was about transparency. Shareholders had to address their questions to the board by June 21, but it was only after that the group announced a far-reaching restructuring: the remaining minority shareholders in the subsidiary Adler Real Estate are to be forced into a settlement, the company removed from the stock exchange, as well as the developer of the Cons. In addition, around 1,400 apartments were transferred from the parent company to a subsidiary, with an estimated value of EUR 326 million. Creditors now fear that the amount may be too high and that they may be harmed in an emergency.

But the shareholders could not say anything on this subject either. “It all fits the picture,” says Carola Rinker, balance sheet expert at the Investor Protection Association (SdK). This is “shocking”, but it shows how virtual general meetings are abused: “An exceptional situation is being exploited to the detriment of shareholders.” Incidentally, as usual, shareholder defense lawyers were also prevented from speaking.

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