“Evergrande” moment in Germany: KPMG does not certify the financial statements of the ADLER real estate group. Collapse in the stock market

30 April 20222 years ago babelfish

Is an "Evergreen Moment" approaching also for Germany, with crises that upset the real estate sector? The auditing firm KPMG refused to sign the financial statements of the real estate group for the year 2021, paving the way for doubts and disputes, even if the company decided to present it all the same, without the auditing firm's approval, to the shareholders. . the disputes start from afar, linked to the value of the properties in the portfolio, and have led to the collapse of the value of the shares in the last year equal to 70%.

As the Financial Times states: On Friday, Adler revealed that his auditor, who had commissioned the group with an unskilled audit in the previous year, would have issued a precautionary statement on the 2021 consolidated accounts. "The auditor was unable to to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on these annual accounts , ”the company said. Adler has debts of € 7.4 billion, enough to cause a real financial tsunami across the Alps.

The company's problems start from the disputes of the research group on equity values Viceroy which a year ago challenged the book values of the Adler group accusing it of over-valuation of real estate assets, inappropriate transactions with third parties and of having manipulated the accounting to improve it. Very serious allegations that had pushed the stock down and convinced the company of the need for additional forensic auditing by an ad hoc team. This team, led by KPMG, on the one hand denied some of the allegations of the Viceroy group, but on the other hand confirmed others. Above all, the value of the package of small real estate properties appeared overvalued, and in general the value of the company's assets appears overvalued by 17%, for a value of 2.4 billion euros. Furthermore, the auditing firm acknowledged that there were suspicious exchanges with the controversial real estate developer Cevdet Canet who, among other things, exercises management interference not justified by any administrative role in the company.

An auditor who does not certify the financial statements is a big problem, also because in the past we have highlighted how these companies are not really ferocious watchdogs, but always try to take a benevolent look, if not just close their eyes. as in the case of Wirecard. The overestimation of the properties of the group is significant, also because the value of the company's net assets is currently only 770 million euros so that either it is already discounted in the valuations, or it brings the assets down. The company is selling real estate to ease its debt position, but too rapid liquidation risks worsening, not improving, the situation.

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Momento article “Evergrande” in Germany: KPMG does not certify the financial statements of the real estate group ADLER. Crollo in the stock market comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/momento-evergrande-in-germania-kpmg-non-certifica-i-bilanci-del-gruppo-immobiliare-adler-crollo-in-borsa/ on Sat, 30 Apr 2022 07:14:10 +0000.