On Friday, investors reacted with relief to the news that the Adler Group was relieved of allegations of systematic fraud.

The share price of the real estate group, which collapsed in October last year after just such allegations, rose by almost 17 percent at the opening.

At the peak of the day it was even a good 20 percent.

So far, however, the share has not been able to rise again to the price levels from the time before the allegations.

In fact, the course fell again by midday to a plus of 7.7 percent.

The auditor KPMG found deficiencies in the documentation and in the processing of some transactions, Adler Group announced on Friday night.

However, there was no evidence of systematic "fraudulent transactions or transactions plundering the company with allegedly related persons".

With a view to shortcomings, KPMG listed a transaction with an “allegedly close person” for a prestige project in the Gerresheim district of Düsseldorf.

The accusation that the sales price for the project company was excessive could not be refuted by the special auditors, it said.

From KPMG's point of view, it is doubtful whether the valuation of 375 million euros corresponds to the fair value according to the applicable accounting rules.

However, the real estate group "still believes that the fair value agreed in the transaction for the project company, which is also shown and certified in several audited annual financial statements, is correct".

there are ambiguities

However, KPMG has refuted the accusation that the method used by Adler to calculate the mortgage lending value, i.e. the relationship between the loan volume and the market value of the property, had been changed in order to avoid violations of the corresponding bond conditions.

However, according to KPMG, the leverage ratios derived from the bond conditions do not fully correspond to the textual requirements.

A correction of the fair value of the Gerresheim transaction, which KPMG deems necessary, would result in a one-time excess of the loan-to-value (LtV) of more than 60 percent as of September 30, 2019 at the level of the subsidiary Adler Real Estate .

The Federal Financial Supervisory Authority (Bafin) commented on the report on Friday afternoon.

Based on this, it is not yet possible to say whether there were violations at Adler.

The authority said that the KPMG review would be included in a separate assessment that is in progress.

The review goes back to allegations by the investment firm Viceroy of short buyer Fraser Perring.

He first made serious allegations at the beginning of October 2021 - among other things with a view to the valuation of real estate projects.

On October 4, 2021, Adler Group announced a strategic realignment.

The sale of parts of the rental portfolio should be examined, and the proceeds from this could be used to buy back bonds and shares.

The share price then shot up by almost 18 percent, of which a meager 2.6 percent remained at the end of the day.

The next day, the papers even collapsed by more than 11 percent.

Viceroy report followed share price fall

It cannot be ruled out that the financial vehicle Viceroy sold shares in the Adler Group short during this phase, i.e. expected prices to continue to fall.

A day later, on October 6th, the short seller reported on Twitter that a report dedicated to the Adler Group had been completed.

The course then fell by 33 percent to EUR 9.025.

It was the lowest level in the stock market's history for a good six years to date.

Within three trading days, the price had almost halved from high to low.

In the months that followed, the price fluctuated around the EUR 11 mark, sometimes with sharp fluctuations.

With prices above 14 euros, the papers would beckon to break out of this trading range, which the share has so far failed to do with a daily high of 13.95 euros.