“Bank N26, Groupe Immobilier Adler, Germany worries the world! Published by Charles SANNAT

"Bank N26, Groupe Immobilier Adler, Germany worries the world!  Published by Charles SANNAT

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My cheeky ones, my cheeky ones,

The pandemic has a good back and allows us to forget many things, adversity and other scandals. When there is no pandemic, it is the war in Ukraine that keeps people busy. If by chance nothing more happens, the daily flow of information, even more insignificant than the other, is more than enough to make it possible to forget the basics by occupying the available brain time.

For these reasons it is very important sometimes to take the time to put things right. To remember some events of the past in order to better understand what will happen very soon.

So let’s turn to Germany, which is so praised for its current economic success.

Remember the Wirecard scandal.

The Wirecard scandal refers to the bankruptcy of the German company Wirecard, which follows a possible accounting fraud for an amount of almost 2 billion euros. This case was named “Enron of Germany”. In addition to the Wirecard management team, this bankruptcy is devouring the financial auditor Ernst & Young and the Federal Financial Supervisory Authority, which is responsible for regulating and controlling the financial sector in Germany.

Founded in 1999, Wirecard is a German start-up that offers solutions for securing online payments. It became a member of DAX in Frankfurt in 2018. Although the company experienced strong growth during its existence (reaching 300,000 corporate customers in June 2020), the press regularly repeated rumors and questions about the business model and possible irregularities. of Wirecard.

The case erupted in June 2020, when the company acknowledged that 1.9 billion euros in its balance sheet (almost a quarter of its total balance sheet) probably did not actually exist.

At the political level, German Finance Minister Olaf Soltz speaks of an “unparalleled scandal in the financial world” and secures the strengthening of controls in the field of electronic payments. The Minister also announced a reform plan for BaFin, the body responsible for financial supervision of companies in Germany.

N26 is worried, from the USA where it stopped its activities in Italy through Germany.

The original name of the bank (Number 26) refers to the number of small cubes that make up a Rubik’s Cube.

Since its inception in February 2013 in Berlin, Germany, Number26 has been a partner of Wirecard Bank (and we find the same ones !!) based in Munich and holding a banking license. This partnership allowed her to issue bank cards until 2016, when she obtained her own European banking license. It is known for the occasion N26.

On December 3, 2015, N26 opens in six new European markets, including France

Berlin neobank is claiming more than 7 million in 2021 and is starting to hit the headlines.

In the United States, N26 had to close down and close its 500,000 customer accounts by the end of 2021.

In Italy, the Bank of Italy banned her from opening new accounts and continuing to grow.

In France, there are hundreds of customers who are just complaining about the closure of their accounts and the inability to access their money, leaving the bank deadlocked.

As for the bank’s executives, as confirmed by the Reuters mission in February (source here) “Four directors of the German electronic bank N26 are under investigation by the prosecutor’s office on suspicion of fraudulent customer accounts,” the Handelsblatt newspaper reported on Friday. Criminals are believed to have opened multiple accounts to run fake online stores or launder money, for example, and customers have complained that the reported accounts were not blocked in a timely manner, according to Handelblatt. A N26 spokesman said the bank had no information on ongoing investigations. »

Personally, I have a free and very practical N26 account for my daily operations with an application that works very well on your smartphone, but above all do not leave there too large amounts, as was the case with Alexis. Our 27 years – old engineer and his blocked 23,000 euros.

The Neobanks, the N26 like all the others generally lose money every year, are not necessarily very stable nor necessarily very structured. These are more start-up companies, ideally suited for rapid growth, but are often a disastrous model for controlling risk management. Therefore, do not exceed 2,000 euros in assets in this type of facility.

But it’s not just that, a huge real estate group

ADLER Real Estate. KPMG refuses to certify the accounts of one of the largest German real estate groups, which is collapsing in the stock market

Just two years after the Wirecard scandal in Germany, is the country again on the brink of another accounting fraud?

“The Adler Real Estate group” has been targeted since this fall by short sellers, including the now famous Fraser Perring, who has made big profits in the Wirecard, Steinhoff and Grenke scandals. He and others suspect that the property owner is falsifying his accounts. Adler released its financial results for 2021 on Saturday, which show that the group, one of the largest in the industry in Germany, suffered a loss of 1.24 billion euros last year… Finally, according to its own claims. The stock market fears the reality is much worse after Adler’s auditor, KPMG, refused to certify the accounts.

Last October, Viceroy Research, which owns the short seller, claimed that “the Adler Group’s balance sheet has been artificially inflated to a significant degree. Allegations that KPMG did not completely refute when the company recently released its findings. Revealed flaws in compliance and governance, but not systematic fraud.

In the stock market, Adler plunged another 46% today, with its shares falling to a new all-time low of 3.88 euros (-65% since the beginning of the year, after -63% in 2021, -92% from in the summer of 2018 record). »

Adler’s board submitted his resignation last weekend

Germany will get into a bad patch.

While Germany remains at the top of the European economy, its dependence on Russian gas, its oversized industry, the speculation of some of its companies and the complacency of regulators could well lead to a difficult and uncomfortable period for our German neighbors.

It’s already too late, but not everything is lost.

Prepare!

Charles Sunnat

“Insolentiae” means “insolence” in Latin
Write to me charles@insolentiae.com
To write to my wife helene@insolentiae.com

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