German Leasing Firm Grenke Launches Audit After Fraud Claims
Faizan Hashmi 1 month ago Mon 21st September 2020 | 05:16 PM
German financial leasing firm Grenke on Monday said it would commission an independent audit to examine its franchise activities following accusations of fraud
Frankfurt am Main (UrduPoint / Pakistan Point News - 21st Sep, 2020 ) :German financial leasing firm Grenke on Monday said it would commission an independent audit to examine its franchise activities following accusations of fraud.
British investor Fraser Perring of Viceroy Research last week alleged accounting fraud at Grenke, saying its franchising operations were "designed to either hide fake cash or siphon off millions of Euros to undisclosed related parties, or both".
Shares in Grenke have lost nearly half their value on Frankfurt's MDax since the report by short-selling specialist Perring, who in 2016 sounded the alarm over the disgraced payments provider Wirecard.
The Baden-Baden based company said in a statement that it wanted an independent audit from an outside company to examine past acquisitions of franchises and their "advantageousness" for the Grenke group.
Grenke has also asked its usual auditor KPMG to separately conduct a "special audit" to rebut the fraud allegations.
Grenke said its expansion into new markets abroad has so far been carried out via franchise companies, in which the controlling interest was held by "various financial investors", such as CTP, a firm indirectly owned by Grenke founder Wolfgang Grenke.
After four to six years, the Grenke group would acquire the franchise.
Grenke said that it would now consider a shake-up of the franchise system, including by becoming a shareholder in a franchise company from day one and by possibly acquiring all of CTP's franchise shareholdings.
Wolfgang Grenke, who holds a stake of around eight percent in the company that bears his name, said he would temporarily step down from his role as deputy chairman of the supervisory board to avoid any conflict of interest.
Grenke employs more than 1,700 staff and operates in 33 countries.