KPMG refuses to sign off on Adler audit over allegations of wrongdoing
Big Four accounting firm KPMG refused to sign off on German property group Adler’s 2021 financial results, after an investigation by the auditor last week revealed widespread problems with the company’s corporate governance. real estate company.
In a statement, the Berlin-based property company, which owns 52,000 apartments across Germany, said KPMG had “not been able to obtain sufficient and appropriate audit evidence to provide a basis for an opinion. audit of these annual accounts”.
KPMG’s refusal to sign Adler’s accounts comes after an investigation by the auditor last week revealed widespread problems with the management of the German property company.
The investigation came after investment group Viceroy Research accused Adler Group of being “a hotbed of fraud, deception and financial misrepresentation designed to hide its true financial position”.
The Delaware short-selling group claimed Adler had “artificially inflated” its balance sheet as it alleged that the company’s management had engaged in “fraud” and “gross dishonesty”.
KPMG investigation showed ‘inappropriate attempts’ were made by Austrian property tycoon Cevdet Caner to influence Adler’s decision-making as it revealed Caner had significant involvement in strategic decisions , executive recruitment and other operational matters.
While Adler claimed Caner was not involved in the day-to-day running of his business, the investigation revealed that a corporate strategy meeting took place on the real estate mogul’s personal yacht and that Adler executives used his private jet for business trips.
The investigation also found that Adler’s property development portfolio was overvalued, as it claimed the actual value was around 17% lower than the €2.4 billion listed in Adler’s accounts. .
However, Adler President Kristen said the report presented no evidence of ‘fraud or deception’ and claimed the investigation cleared Adler of any ‘systematic and extensive enrichment at the expense of other stakeholders’. .
The KPMG report also said there was no evidence that Adler’s main rental portfolio was overvalued. Kristen said any “wrong financial statements” would be corrected, as he claimed they were “immaterial and therefore irrelevant to stakeholders”.