In a statement sent to AFP, the Luxembourg-based company confirmed the investigation, stating, “We confirm the investigation carried out today (…) at the business premises of the Adler group.” Adler is predominantly active in Germany.
The Frankfurt public prosecutor’s office, in conjunction with the German Federal Criminal Police Office, announced in a press release that “extensive searches” had been conducted at properties belonging to a “company listed on the stock exchange in the real estate sector,” without specifically naming Adler.
The operations involved nearly 180 police officers and targeted “21 properties, including offices, flats, and a law firm” in Germany, primarily in the regions of Berlin and North Rhine-Westphalia, as well as in “six foreign countries,” including “Austria, the Netherlands, Portugal, Monaco, Luxembourg, and the United Kingdom.”
The German judicial authorities are continuing their investigation into suspicions of “balance sheet falsification, market manipulation, and embezzlement” involving former members of Adler’s management board, all of whom are German, Austrian, or British nationals aged between 38 and 66, according to the public prosecutor’s office.
These suspects are accused of artificially inflating the value of real estate assets on the balance sheet between 2018 and 2020 and signing fraudulent consultancy contracts that resulted in financial losses for the company.
The Adler property group has faced turmoil for several years due to severe allegations of accounting fraud, resulting in a plummeting share price of over 95%. On Wednesday, the share price further declined by 2% to €0.43 on the Frankfurt Stock Exchange.
Wednesday’s searches follow a criminal complaint filed in April 2022 by the German Federal Financial Supervisory Authority (BaFin), which had previously conducted its own investigations into various suspected frauds at Adler.
BaFin’s attention was drawn to the matter by a scathing memo published in 2021 by short-seller Viceroy Research, accusing Adler of being “a hotbed of fraud, deceit, and financial misrepresentation.”
Adler Group said that it is now “cooperating with the authorities” and “fully expects the facts to be clarified as quickly as possible,” as outlined in a statement issued on Wednesday.
