Leasing Firm Grenke Under Fire as Viceroy Raises Fraud Alarm
- BaFin is looking into fraud allegations against Grenke, whose share price dropped 30% following the release of Viceroy report.
Short seller Viceroy Research, which was the first to raise the alarm on the collapsed payment company, Wirecard, has set its sights on Grenke in its latest report, marking the latest blow for a German financial services provider.
Grenke stock saw their biggest drop in more than three decades on Wednesday after the short seller targeted the leasing company, accusing it of issuing fraudulent financial statements to hide the extent of its problems.
German financial watchdog, BaFin said it is looking into fraud allegations against Grenke, whose share price dropped as much as 30 percent at one point following the release of the report from the company owned by investor Fraser Perring. The report accuses the company of market manipulation, Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and fraud, as well as a host of other allegations it made against the company in a 64-page report.
Established in 1978, Grenke specialises in IT leasing for the B2B sector and provides financial services to IT resellers only. Additionally, it provides resellers with commercial leasing for its customers.
Viceroy Research essentially has accused Grenke of inflating its balance sheet to present exaggerated numbers and cash in hand. It further claims that Grenke has overpriced its acquired companies and related-party franchises by setting high values on the balance sheet.
Moreover, Viceroy claimed that the company has forged its fortunes through a fraudulent scheme designed to either 'hide fake cash or siphon off millions of euros to undisclosed related parties, or both'.
Furthermore, it questioned Grenke’s banking business which Viceroy says has been facilitating crime and money laundering, whilst defrauding small businesses and charities.
Grenke Prepares Reply and Legal Action
In response to claims made by Viceroy Research, a Grenke spokesperson has stringently dismissed the allegations and hinted that the short seller could face legal consequences for making false claims.
“A central accusation is that a substantial portion of the 1,078 million euros in cash and cash equivalents reported in the 2020 half-year financial report does not exist. This is demonstrably false,” Grenke said in a statement.
But, it emerged this week that Viceroy was not the first to question Grenke’s business model. BaFin said it had been investigating possible insider trading even before the Viceroy report’s publication.
In addition, the watchdog investigates whether there was manipulation by third parties in the form of a short sale attack. The leasing specialist has a market capitalization of more than €4.0 billion, so it is too big to fly under the radar.
Viceroy has published research reports that raised red flags on many companies, but it was their work on German payment giant, Wirecard that established the firm’s stature in the financial markets. Once a star in the German financial sector, Wirecard shocked the financial world when it admitted last month that €1.9 billion ($2.2 billion), which makes up a quarter of the balance sheet, was missing from its accounts in Asian banks. The DAX-listed company has since filed for Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term and now likely on the verge of collapse.
Short seller Viceroy Research, which was the first to raise the alarm on the collapsed payment company, Wirecard, has set its sights on Grenke in its latest report, marking the latest blow for a German financial services provider.
Grenke stock saw their biggest drop in more than three decades on Wednesday after the short seller targeted the leasing company, accusing it of issuing fraudulent financial statements to hide the extent of its problems.
German financial watchdog, BaFin said it is looking into fraud allegations against Grenke, whose share price dropped as much as 30 percent at one point following the release of the report from the company owned by investor Fraser Perring. The report accuses the company of market manipulation, Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term and fraud, as well as a host of other allegations it made against the company in a 64-page report.
Established in 1978, Grenke specialises in IT leasing for the B2B sector and provides financial services to IT resellers only. Additionally, it provides resellers with commercial leasing for its customers.
Viceroy Research essentially has accused Grenke of inflating its balance sheet to present exaggerated numbers and cash in hand. It further claims that Grenke has overpriced its acquired companies and related-party franchises by setting high values on the balance sheet.
Moreover, Viceroy claimed that the company has forged its fortunes through a fraudulent scheme designed to either 'hide fake cash or siphon off millions of euros to undisclosed related parties, or both'.
Furthermore, it questioned Grenke’s banking business which Viceroy says has been facilitating crime and money laundering, whilst defrauding small businesses and charities.
Grenke Prepares Reply and Legal Action
In response to claims made by Viceroy Research, a Grenke spokesperson has stringently dismissed the allegations and hinted that the short seller could face legal consequences for making false claims.
“A central accusation is that a substantial portion of the 1,078 million euros in cash and cash equivalents reported in the 2020 half-year financial report does not exist. This is demonstrably false,” Grenke said in a statement.
But, it emerged this week that Viceroy was not the first to question Grenke’s business model. BaFin said it had been investigating possible insider trading even before the Viceroy report’s publication.
In addition, the watchdog investigates whether there was manipulation by third parties in the form of a short sale attack. The leasing specialist has a market capitalization of more than €4.0 billion, so it is too big to fly under the radar.
Viceroy has published research reports that raised red flags on many companies, but it was their work on German payment giant, Wirecard that established the firm’s stature in the financial markets. Once a star in the German financial sector, Wirecard shocked the financial world when it admitted last month that €1.9 billion ($2.2 billion), which makes up a quarter of the balance sheet, was missing from its accounts in Asian banks. The DAX-listed company has since filed for Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term and now likely on the verge of collapse.