Viceroy argued Adler's German property portfolio was systematically overvalued and that a web of undisclosed related-party transactions moved assets at prices designed to support the balance sheet rather than reflect the market.
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The valuation loop
A leveraged property vehicle can look solvent indefinitely if it controls the marks. The research argued Adler's marks were set by transactions with parties that were not independent.
Findings
- Development assets sold and re-sold within a related network at escalating prices
- Net asset value per share materially above achievable disposal proceeds
- Debt maturities dependent on continued asset-sale execution at inflated marks
The conclusion
An opaque, leveraged balance sheet with a valuation that only held while the network kept transacting.
subsequent events
- 2021-10-06Report published; shares and bonds fall
“Valuations are set by transactions with parties that are anything but independent.”
- 2022-04-29Forensic review reports significant unresolved findings; auditor issues disclaimer
- 2022-05-13Board and management changes announced
Source — https://viceroyresearch.org/
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