Adler Group provided a corporate update on Tuesday designed to go some way to reinstall confidence in the ailing German residential property company following serious problems.
The company said that from 1 June it would be bolstering governance and strengthening senior management by the appointment of Thomas Echelmeyer as interim CFO.
He will hold the position temporarily until the CFO position is finally filled, a process that is underway.
Echelmeyer has worked since 1986 as auditor and tax consultant as well as a partner at Arthur Andersen and EY. In 2007, he moved to the real estate industry and served as CFO of GWH Immobilien and other real estate companies.
‘We are very pleased that Thomas Echelmeyer is taking over the finance department on an interim basis and will accompany us until the CFO position is permanently filled,’ said chairman of the board of directors, Stefan Kirsten. ‘He is well known to the board and, thanks to his comprehensive expertise, the perfect support in the current phase.’
The CEO also said PwC would analyse and develop a ‘robust compliance function’ at Adler Group to improve structures and processes within the company, with a particular focus on corporate governance.
In addition, it has appointed PJT Partners as financial advisor to ‘support the company in the refined cashflow analysis, and in the intensive exchange with its financial partners and the capital market’.
PJT will work side by side with Kempen, Adler’s long-standing corporate finance advisor.
The board has also commissioned an international law firm to clarify other possible legal claims against the company and its affiliates.
Earlier this month, shares in the company fell 45% at one point when KPMG refused to sign off on 2021 financial results.
Adler has said it made a net loss of €1.18 bn having written off €1 bn from its development operations while also worrying investors by saying it could not raise additional funds over fears that would violate bond covenants.
The company has been struggling with allegations made by so-called short seller Viceroy Research last October, which questioned valuations and ties with Austrian, Cevdet Caner.
Adler has denied allegations, which triggered an investigation by German regulator, Bafin, which is still ongoing.
Adler said on Tuesday that the board proposed to appoint KPMG as auditor for the fiscal year 2022. However, it seems KPMG has declined to carry out the work following claims it did not have access to thousands of documents previously.
The next Annual General Meeting will take place on 29 June. All members of the board of directors will individually face a vote by shareholders for reappointment or – in case of the chairman - for their first appointment.
‘As already stated, the Board of Directors will take all steps with the company as of the half-year financial statements to heal the disclaimer of opinion concerning the consolidated financial statements of 2021. The company will seek an unqualified opinion for its audited consolidated financial statements of 2022,’ said the company.
The board has also decided it was ‘not advisable’ to the company to pay a dividend in the light of the existing disclaimer of opinion of the auditor.
