Multiple European media outlets, the Financial Times, and Reuters on Wednesday reported that police raids took place across seven European jurisdictions, including Monaco, as investigators probe the financial transactions of Adler Real Estate, majority-owned by Adler Group.

Adler Real Estate owns 70,000 apartments and other properties in Germany.

Frankfurt prosecutors said that 20 offices and apartments as well as a law firm in Germany, Austria, the Netherlands, Portugal, Monaco, Luxembourg and Britain were searched. Around 175 people from the public prosecutor’s office and the federal police were involved, they said.

German, Austrian and British nationals between the ages of 38 and 66 are under suspicion of false accounting, market manipulation and breach of trust, the prosecutors added.

Several current and former board members of Berlin-headquartered Adler Real Estate are suspected of misrepresenting balance sheets or supporting others in doing so between 2018 and 2020, the prosecutors said.

They are also suspected of making fictitious transactions to drive up prices for projects and achieve a favourable loan-to-value (LTV) ratio, sending false signals to capital markets, the Frankfurt prosecutors said in the statement.

An Adler Group spokesperson said that none of the parent company’s board members were under investigation.

Germany’s financial regulator BaFin had no comment. Adler Group, one of Germany’s biggest landlords via Adler Real Estate, has been embroiled in an accounting investigation following accusations by short sellers in 2021 that the company’s balance sheet had been artificially inflated. Its shares have fallen by more than 90 percent over the last two years to £0.43 on Wednesday, June 28.

Auditors from KPMG had refused to give Adler Group an audit certificate for the 2021 annual financial statements, citing a lack of information on transactions with persons related to Adler, and also refused to accept the mandate for 2022.

The Financial Times reports that Adler Group has been unravelling since short selling group Viceroy Research in 2021 accused the company of widespread fraud and inappropriate transactions connected to Cevdet Caner, an Austrian property magnate who lives in Monaco. and Luxembourg-based investment firm Aggregate, of which he is CEO, one of the company’s investors. Viceroy Research accused Adler of being “a hotbed of fraud, deception and financial misrepresentation.”

Two of the premises raided on Wednesday were those of Mr Caner, who lives in Monaco. The FT reported on Wednesday that Ben Irle, Mr Caner’s lawyer, had confirmed that his client’s premises in London and Monaco were raided. Mr Caner is closely associated with the Adler Group through his role as CEO of Aggregate Holdings, and it is alleged by at least one business associate that he secretly controls the business.

According to his LinkedIn profile, “Cevdet Caner is an international leader in real estate investment. He currently serves as the CEO of Aggregate Holdings SA, and has expertise in the fields of proptech and fintech.” He is the son of Kurdish immigrants to Austria and was educated at the University of Linz.

The FT wrote on Wednesday that the drastic move by law enforcement authorities marks a major escalation into an accounting scandal at the Berlin-based and Frankfurt-listed real estate group.

In 2009 Mr Caner famously lost his home on Charles Street in Mayfair when it was repossessed. He had paid £16 million for the house in 2007 and spent £5 million on renovations. He claimed at the time that he had offered to repay his loan but the offer was refused.

The London Evening Standard wrote in 2009 that Mr Caner’s Monaco-based property investment company Level One, “which acquires low-cost homes and social housing in Germany,” had been hit badly by the slump of 2008 and went into administration that year.

ORIGINAL SOURCES: Reuters, Financial Times, London Evening Standard, www.zonebourse.com, local reports

PHOTOS: Top, Mr Caner in 2009, courtesy Evening Standard, centre, from his LinkedIn profile