02. Sep 22

Turbulent times at Adler Group – What options do investors and shareholders have

The real estate giant Adler Group has been rocked by the decision of its auditors not to issue an audit certificate for the annual balance sheet for 2021. The ensuing share price collapse saw the Group’s stock fall to a record low

These are uncertain times for Adler Group’s shareholder and investors. The real estate group took a long time to publish its balance sheet for 2021, presenting the figures at the last minute on April 30, 2022. And the loss of around 1.2 billion euros is unlikely to be the only concern that investors and shareholders have. Most notably, the auditors refused to approve the balance sheet. Following the subsequent crash in the stock price, which plummeted to a record low, the price has since risen again.

But this is unlikely to have fully addressed the concerns of shareholders and investors. The auditors’ refusal to issue an audit certificate weighs heavily.

Serious allegations were leveled against the Adler Group by a British investment firm as far back as fall 2021, with these centering on the accusation that the balance sheet had been artificially inflated by overvalued real estate. Adler Group vehemently denied the allegations and commissioned auditors to conduct a special audit.

The findings were presented at the end of April and are unlikely to fully reassure investors. While there appears to be no evidence of systematic fraud, it is noteworthy that the auditors nonetheless refused to issue an audit certificate. According to media reports, they justified this on the grounds that they had been denied access to certain information in connection with significant transactions, claiming that this meant that an audit certificate could not be issued for the 2021 financial figures. Several members of the board of directors subsequently resigned.

Adler Group shareholders, on the other hand, despite facing substantial share price losses, may be entitled to claim damages because of a breach of disclosure obligations. We at the commercial law firm MTR Rechtsanwälte note that as a stock corporation, Adler Group is obliged to immediately publish any material information that has the potential to influence the stock price. In the event that these ad-hoc obligations are breached, the shareholders may be entitled to claim damages. Bond investors could also benefit from having someone review their legal options.

Adler Group investors and shareholders can turn to lawyers with experience in the fields of capital markets law and stock corporation law.

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