(Bloomberg) -- KPMG will quit as auditor of Adler Group SA, the embattled German real estate firm, after refusing to give an opinion on its 2021 accounts. 

The resignation came hours after Adler Chairman Stefan Kirsten told reporters that it was planning to reappoint KPMG to audit its 2022 results. The decision is a “great surprise to us and is disappointing as well as irritating,” Kirsten said in a statement. 

Adler shares plunged 14% to 5.02 euros. Bonds due in 2029 fell 2.5 cents on the euro to 57.5 cents, according to data compiled by Bloomberg. 

The move is a setback for Adler, which has been embroiled in turmoil over short sellers alleging fraud. KPMG, which led an investigation on the accusations, refused to endorse the company’s accounts after it withheld information on some deals.

Kirsten said earlier on Tuesday that Adler aimed to rectify the disclaimer of opinion for the 2021 results and achieve an unqualified audit for the next year.

“Adler Group certainly had its discussions and disagreements with the forensic department of KPMG during the special investigation,” Kirsten said. “However, and completely independent of this, is the fact that we had worked very professionally with the KPMG auditors and wanted to continue doing so.”

The company now plans to find a new auditor and the process will take time, Kirsten said. 

Consus Woes

Separate to the KPMG news, Adler also said on Tuesday that it’s considering ways to save Consus Real Estate, a unit that’s on the brink of insolvency, including with a debt-for-equity swap.

Kirsten said Adler is reviewing all options to fix the unit, but is excluding those that’ll reduce cash held by the parent company. Consus has a 1 billion euros of intercompany liabilities. 

In February, the chairman was brought in to help restore market confidence in Adler, which has been rocked by allegations of fraud and inflated valuations. Accusations centered on the role and fees paid to Cevdet Caner, an Austrian financier who advised Consus’ controlling shareholder at the time of the merger, which later became Adler’s largest investor. Caner’s family members are also shareholders in Adler. 

Adler Efforts to Contain Crisis Unravel in Roller Coaster 

Kirsten also said the company will offer a credit line of 200 million euros to keep afloat Brack Capital Properties, another subsidiary. Adler has been seeking to sell its stake in the unit to LEG Immobilien SE to generate up to 850 million euros in cash. The rival has an option to take it over until the end of September but its management said last week they haven’t yet taken a decision and may eventually not exercise it.

Adler hired PJT Partners as financial advisers to help it with cashflow analysis and debt refinancing, while PricewaterhouseCoopers will work with management to improve compliance. It appointed Thomas Echelmeyer as interim chief financial officer, it said in a separate statement.

Adler Hires PJT Partners as Financial Adviser, to Skip Dividend


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