(Bloomberg) --

One of the biggest shareholders in embattled German real estate firm Adler Group SA sold almost its entire stake after the company was targeted by short sellers. 

Fairwater Multi-Strategy Investment sold a 5.5% stake on Wednesday and now owns less than 0.1% of the company, according to a regulatory filing. 

Fairwater is the first of Adler’s top shareholders to cut exposure to the company since Fraser Perring’s Viceroy Research published a report alleging that Adler is a “hotbed of deception.” Adler has denied all of the accusations. 

The sale also highlights the tangled links between Adler and its owners. Fairwater’s real estate fund is controlled by Adler’s largest shareholder, Aggregate Holdings SA. Aggregate is owned by Austrian investor Guenther Walcher and advised by Cevdet Caner. 

Orlando Gemes, founding partner of Fairwater Capital, confirmed the stock sale adding the fund is managed on a discretionary basis, but declined to comment further. A representative for Aggregate declined to comment.

After Adler’s shares collapsed, Aggregate announced on Oct. 7 it would refinance existing margin loans with Vonovia SE, Germany’s largest landlord, in exchange for an option on half of its stake. However, Aggregate’s bonds have continued to decline. Notes due 2025 trade at 56.7 cents on the euro, more than 10 cents lower since the beginning of last week, according to CBBT prices. 

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