Adler Real Estate has been grappling with accusations for years. Now, the state financial supervisory authority, Bafin, has once again confirmed overvaluations in the real estate company's balance sheet.
The financial supervisory authority has found that the financial situation of Adler Real Estate was significantly overrepresented in the balance sheets of the years 2020 and 2021. This concerns both inflated valuations of the real estate project "Glasmacherviertel" in Düsseldorf, which the BaFin auditors had already criticized for the year 2019, as well as an overvaluation of the stake in the housing company Accentro.
Furthermore, it was not recorded in the 2021 financial statements that Adler Real Estate did not receive any collateral for a controversial loan amounting to 265 million euros to the Luxembourg parent company Adler Group.
The BaFin has concluded the more than two-year balance sheet control procedure against Adler Real Estate. Since the Wirecard scandal, it has taken over the tasks of the "balance sheet police" DPR at publicly traded companies. The Adler Group emphasizes that neither a restructuring of the balance sheets nor a fine has been demanded by BaFin. It also continues to not share BaFin's skepticism towards the "Glasmacherviertel" and considers the valuation of 270 million euros at the end of 2021 to be "appropriate and correct".
Adler now checks whether it will take action against the error detection. Already more than two years ago, the company came under criticism from British short seller Fraser Perring. He accused the real estate group of artificially inflating the valuations of numerous properties. Adler had difficulties finding new auditors for its financial statements.
According to the auditors, the "Glassmaker District" in the balance sheet for the year 2020 was overvalued by at least 86 million euros. According to their opinion, even for the year 2021, after the reversal of the project's sale, it was valued at less than 270 million euros.
The planned residential quarter is to be built on the site of a former glassworks in the Gerresheim district of Düsseldorf. According to the Bafin, the assumptions regarding the start of construction and the completion of the project were too optimistic, especially since there was no development plan for the site.
According to Bafin, the 59 million euros from the sale of the majority shares in Accentro in 2017 should have been reported in the balance sheet with a risk discount. This is because the buyer of the shares missed several payment deadlines after Adler had already transferred the shares to him. Nevertheless, the securities were valued at the stock market price. Accentro is now 83 percent owned by the financial investor Brookline, who entered in 2017.
