The Baden-Württemberg leasing provider Grenke sees itself relieved of significant allegations by British investor Fraser Perring through special audits.
At the current status, “no significant abnormalities” are recognizable in the business model and business organization, said BITTER on Tuesday with. The takeovers of the previously audited franchise companies could also be described as positive.
The audits have not yet been finalized and there have not yet been any interim reports from the audit firms Warth & Klein Grant Thornton or KPMG, said GRENKE boss Antje Leminsky. But she is confident that the investigation will soon be over. “We are also using this situation as an opportunity and are working on a vision of the future that will above all meet the increased expectations of governance and transparency in our rapidly growing company.” For example, GRENKE is considering restructuring the franchise model.
The investor Fraser Perring, one of the first critics of the payment processor Wirecard, which collapsed in a balance sheet fraud scandal in June, accused GRENKE of fraud, balance sheet falsification and money laundering in a 64-page report in mid-September. Among other things, he claimed that the franchise business was of no value and that a significant part of the cash on the balance sheet did not exist. This accusation had been cleared out by the KPMG auditors, explained GRENKE. KPMG had confirmed to GRENKE that the auditors had received receipts from the banks for more than 99 percent of the balances at commercial banks and central banks.
KPMG also analyzes incoming payments from lessees and the existence of leasing contracts. According to GRENKE, the examiners from Warth & Klein Grant Thornton are currently taking a detailed look at four selected, significant franchise businesses between 2008 and 2018. The audit showed that the companies taken over since 2008 together generated earnings contributions for the group. Investments in participations are justified.
GRENKE primarily earns its money by lending IT and other technology products to small and medium-sized companies as well as with related services and operates its business through franchise companies, among others. The Baden-Baden group defends itself against the attack by the investor who, by selling short, aimed at a fall in the price of GRENKE shares. The financial supervisory authority BaFin and the special money laundering unit of customs (FIU) are also screening GRENKE. The authorities are accused of having failed in the Wirecard case and not having discovered what was going on there.
GRENKE pick up after the interim status – skepticism on the market
GRENKE shares temporarily jumped more than 11 percent to EUR 38.58 on Tuesday afternoon via XETRA. In the afternoon the plus amounts to 7.58 percent at 36.92 euros. This means that the shares are still the front runners in the small cap index MDAX. A month ago, the leasing provider’s papers were passed on for less than 24 euros in the course of a short sale attack.
Statements by the financing specialist for small and medium-sized companies on the interim status of the special audits of the balance sheet did not convince many on the market. On the part of the hedge fund and short seller Viceroy was also refilled again in the afternoon under the title “Grenke – business anomalies discovered”.
The interim status published by management of the special audits that were subsequently initiated by the auditors from Warth & Klein Grant Thornton (WKGT) and KPMG convinced the dealer Stefan de Schutter from Alpha Securities trading Not. “At GRENKE you think you’ve refuted a lot, but that’s not how I see it.” In fact, quite a few things went wrong at GRENKE. “And a lot is reminiscent of Wirecard, the only difference being that GRENKE has money.” But according to de Schutter, “much of the business is built on quicksand”.
An analyst was also critical. “A few questions were addressed, but not the core issues,” he said.
As GRENKE announced this afternoon, there are currently no major irregularities in the business model or business organization. However, the exams have not yet been completed. Therefore – with the exception of the partial report on the proof of the means of payment based on the account balances – no interim reports from the auditing companies are available. Frankfurt (Reuters / dpa-AFX)