KPMG has dropped German property firm Adler as an audit client after refusing to sign off on its accounts last month.
In a letter to investors, Adler chairman Stefan Kirsten said KPMG’s decision had come as a “great surprise” to the firm, as he said the firm is now searching for a new auditor.
Kirsten called KPMG’s decision to exit its relationship with Adler “disappointing as well as irritating” as he admitted he had “misjudged” KPMG’s intentions.
The accountancy firm’s decision to ditch the Berlin firm came after shares in the property company plummeted after a KPMG report unveiled widespread issues with Adler’s corporate governance.
The KPMG report revealed Austrian property magnate Cevdet Caner had made “improper attempts” to influence decision making within the firm, which owns 52,000 flats across Germany.
The probe also claimed Adler had overvalued its property portfolio, as the auditor said the real value of Adler’s real estate holdings is likely 17 per cent lower than the €2.4bn sum stated in Adler’s accounts.
KPMG’s decision to drop Adler came less than an hour after the firm told investors that it was in “very professional discussion” with the Big Four accountant to keep it on as its auditor.
The move comes as Adler has faced mounting pressure from Delaware short sellers Viceroy Research, who have accused the firm of being a “hotbed of fraud, deception, and financial misrepresentation”.