In the last few days, there has been a Europe-wide raid at the Adler Group over the suspicion of balance sheet falsification and market manipulation. The German public prosecutor’s office announced that 175 law enforcement agents searched 21 properties in various countries. Likely, the allegations made by short-seller Fraser Perring and his Viceroy back in 2021 will prove true. Adler Group is connected to the Austrian real estate gambler Cevdet Caner.
From the beginning, the Austrian real estate speculator Cevdet Caner has been involved in the public-listed Adler Group. He has already attracted attention several times through wild real estate deals. With his real estate company Level One, pumped full of loans and without any equity worth mentioning, he pulled off the second-largest insolvency in the history of Germany in 2008. Respect! Credit Suisse was one of the main creditors, with around €1.15 billion. Such a track record of real estate projects gone wrong has to be brought together first.
Now it became known that the public prosecutor’s office in Frankfurt and the BKA organized a large-scale raid. 175 law enforcement agents raided 21 properties of the real estate group Adler Real Estate AG. The raid was part of a sprawling investigation into suspected false accounting, market manipulation, and breach of trust.
Business premises, apartments, and a lawyer’s office were searched – in Berlin, Düsseldorf, Cologne and Erftstadt, as well as in Austria, the Netherlands, Portugal, Monaco, Luxembourg, and Great Britain, including those of Cevdet Caner, who lives in Monaco. Ben Irle, Caner’s Berlin-based lawyer, confirmed that his client’s premises in Monaco and London were raided, the Financial Times reports. Caner told the FT he was “happy” about the formal investigation because he was finally “aware what the accusations are,” adding that he was “absolutely relaxed and I am fully co-operating.”
The other suspects are German, Austrian, and English nationals aged between 38 and 66. They are alleged to have misrepresented or aided and abetted the misrepresentation of the company’s financial statements in their capacity as (former) board members in the period from 2018 to 2020.
There is also the suspicion that prices for projects were inflated by means of fictitious transactions to manipulate the “loan to value” (LTV). LTV stands for the ratio of the loan amount to the market or fair value of a property. This may have deceived shareholders and bondholders.
In 2022, the Group again closed with a loss in the billions. Auditors from KPMG had refused to issue an audit certificate for the 2021 financial statements, among other things. The German financial regulator BaFin also discovered errors in Adler Real Estate‘s 2019 balance sheet.
The turbulence at Adler Group was also triggered by a scathing analysis by aggressive short-seller Fraser Perring that appeared in October 2021. Perring said the Adler Group would be a “hotbed of fraud, deception and financial misrepresentation designed to hide its true financial position.” Strong accusations, but apparently they were correct, as the unfolding events since then show.
Adler Group‘s share price has fallen. Its reputation is gone anyway. For Perring, the machinations of the Adler Group are quite comparable to the events at the collapsed Wirecard, he told the Financial Times in 2021. It was also Perring who had uncovered that Caner would be the string-puller behind Adler Group.
Not good times for the mysterious Cevdet Caner. We do not know at this time whether Caner is among the accused, for whom, of course, the presumption of innocence applies.
