Adler Group welcomes Bafin's examination order for the 2021 financial statements of ADLER Real Estate AG

Luxembourg, 22 June 2022 – Adler Group S.A. ("Adler Group") welcomes the examination order (Prüfungsanordnung) of the German Federal Financial Supervisory Authority ("Bafin") for the consolidated financial statements as of 31 December 2021 and the combined management report for the financial year 2021 of its subsidiary, ADLER Real Estate AG ("ADLER Real Estate"). A corresponding examination order was delivered to ADLER Real Estate by Bafin. 

According to Bafin, the examination order has been issued against the background of KPMG AG auditing firm, auditor of ADLER Real Estate, disclaiming on an audit opinion on the consolidated financial statements of ADLER Real Estate. The reason given by the auditor was that it was not possible to assess with sufficient certainty whether transactions have taken place with other related parties and whether these transactions have been recorded completely and correctly. In the opinion of Bafin, there are thus concrete indications that relationships and transactions with related parties may not have been fully and correctly recorded and presented in the consolidated financial statements, contrary to International Accounting Standard (IAS) 24.

The examination by Bafin and its expected results will make a further contribution to clarifying the allegations by a short seller against the Adler Group and its subsidiaries, according to which related parties had exerted influence on transactions and business events.

After the allegations had become known and with the start of the reorganization of the company initiated when Prof. Dr. A. Stefan Kirsten assumed his role as a Chairman of the Board of Directors of Adler Group on 16 February 2022, a comprehensive package of measures was implemented to improve transparency and corporate governance. This included the conclusion of the review by KPMG Forensic with the requirement to submit audited consolidated financial statements of Adler Group and ADLER Real Estate for the 2021 financial year by 30 April 2022, the disclosure of the findings of the review and their reflection in the consolidated financial statements, and the comprehensive communication of the structural and procedural measures to improve transparency and corporate governance. This also includes the appointment of Thomas Echelmeyer as interim CFO on a consultancy basis, the downsizing and effective staffing of the board of directors' committees, the strengthening of the compliance functions with the support of an external consulting firm, and further steps to integrate the Adler Group.

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