Shares of German real estate group Adler dived as much as 46% on Monday after the company said its auditor, KPMG, won’t sign off on its accounts.
KPMG said it was denied access to certain related party information. “This also precludes us from evaluating whether the accounting treatments for at least some of these transactions are appropriate and consistent with their substance, as well as evaluating whether management’s assessment about the valuation of certain account balances is adequate,” said KPMG.
says four board members quit, but that it has met bond covenants by publishing its audited financial statements. “Our existing portfolio is rock solid. The disclaimer is the confirmation of an audit that was carried out without an opinion. We have to accept that, but we will try to eliminate the reasons for the disclaimer as soon as possible,” said Adler’s chairman, Stefan Kirsten, who joined the company in February.
Kirsten last week had taken heart from a KPMG investigation into fraud allegations made by short-selling research firm Viceroy Research. KPMG’s special report discovered payments to Austrian real estate magnate Cevdet Caner that did not correspond to agreed activities but said that it couldn’t verify nor refute many of Viceroy’s allegations. Adler shares had climbed last week after the KPMG report.