As a result of various allegations against ADLER Group S.A. (Adler) as well as against ADLER Real Estate AG, Adler had initiated a special investigation in order to refute various allegations made in public, including allegations of incorrect balance sheets. To a large extent, this was not successful: the final report revealed glaring deficiencies. The price of the Adler share plummeted. In our firm opinion, investors can claim damages for breach of disclosure obligations.

The German Federal Financial Supervisory Authority (BaFin) had previously initiated balance sheet control proceedings in relation to the 2020 and 2019 financial statements and management reports of ADLER Real Estate AG. These will now be expanded: As BaFin announced on June 22, 2022, the consolidated financial statements as of the reporting date December 31, 2021 and the combined management report for the 2021 financial year of ADLER Real Estate AG will now also be subject to an audit. Please find below the complete notice of BaFin regarding this matter.

The expansion of the balance sheet control audit comes as anything but a surprise, is logical based on the recent developments and should be welcomed. The known facts suggest that the consolidated financial statements for 2021 are also flawed. This is supported, among other things, by the fact that the parent company Adler was issued a disclaimer of opinion, the auditor therefore did not want to accept any responsibility for the correctness and even declared a few days later that it would no longer be available as auditor for Adler in the future.

BaFin is in the critical focus of the public in Germany and abroad, not least as a result of the Wirecard accounting scandal. With its measures taken in the Wirecard scandal, BaFin encouraged investors to invest in a scandalous company and thus made itself – albeit certainly involuntarily – an assistant for fraudsters.

It is to be hoped that BaFin has learned from its mistakes and will at least this time make a considerable contribution to protecting shareholders and their rights. With the Financial Market Integrity Strengthening Act (Finanzmarktintegritätsstärkungsgesetz – FISG), BaFin has more tools at its disposal than was the case in the past. It is now upon BaFin to use these tools efficiently.