Europe-wide raids as German property giant probed

Authorities on Wednesday raided properties in seven European countries as part of an investigation into alleged accounting fraud at German real estate giant Adler, the company and prosecutors said.

Published: 28 June 2023 16:44 CEST

Adler Real Estate is written on a postbox in Berlin. Photo: picture alliance/dpa | Christophe Gateau

Twenty-one sites, including business premises, apartments and a lawyer’s office, were searched in Germany, Austria, the Netherlands, Portugal, Monaco, Luxembourg and Britain, prosecutors in Frankfurt said.

About 175 German police took part in the raids against the group, which is listed in Frankfurt and has a particularly strong presence in Germany.

Prosecutors said the raids targeted a “company in the real estate industry”, and Adler later confirmed it was the subject of the searches.

Ex-board members of Adler, who are German, Austrian and English nationals aged between 38 and 66, are under investigation, the prosecutors said.

They are accused of having misrepresented, or having aided in the misrepresentation of the company’s balance sheets between 2018 and 2020, prosecutors said.

They also face other accusations, including that they sought to dishonestly drive up prices for projects.

Investigations began after short seller Viceroy Research published a report in 2021 alleging that the company was trying to “hide its true financial position, which is bleak”.

Adler at the time denied the report.

German financial watchdog Bafin then took up the case and uncovered a number of irregularities.

In a statement Wednesday, Adler said it was “cooperating with the authorities and fully supports a clarification of the facts as quickly as possible.”

The company has been in turmoil since the allegations emerged, with its shares losing more than 95 percent of their value in Frankfurt.

They slid another two percent Wednesday after news of the raids broke.

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Under the new rules, foreigners could face deportation for social media comments that glorify or condone a single terrorist act, according to a draft law agreed by the cabinet.

At the moment, it is necessary to express support for several acts.

After Hamas’s October 7 attack on Israel, which triggered the Gaza war, there was a surge in hate posts on social media in Germany with officials saying Islamists in particular were responsible.

The fatal stabbing last month of a police officer by an Afghan asylum seeker in Mannheim also triggered a surge of such posts, fuelling the debate on deportations.

“It is very clear to us that Islamist agitators who are mentally living in the Stone Age have no place in our country,” Interior Minister Nancy Faeser told the Funke media group, ahead of Wednesday’s cabinet meeting.

“Anyone who does not have a German passport and glorifies terrorist acts here must — wherever possible — be expelled”.

Glorifying acts of terror online fuels a climate of violence that can encourage extremists and violent criminals, according to the draft law, which still needs to be passed by parliament.

Convictions have already been made over some social media posts. An imam in Munich was this month fined 4,500 euros ($4,800) for posting on Facebook that “everyone has their own way of celebrating the month of October”, on the day of the Hamas attack.

In parliament following the Mannheim attack, Chancellor Olaf Scholz also called for those who celebrate acts of terror to face deportation.

Glorifying terrorist offences amounted to a “slap in the face for the victims, their families and our democratic order”, he said.