DUESSELDORF/LONDON – Wednesday, Adler Group SA in Luxembourg said it strongly refuted allegations contained in a report by Fraser Perring’s Viceroy Research. This short seller sent the shares of Adler Group SA down nearly a third.

Viceroy Research published a report on October 6 that stated Adler Group’s balance sheet had been artificially inflated to a substantial degree. The group’s shares have plummeted.

Adler stated in a statement that “this is obviously false.”

The statement added, “The Adler balance sheet’s real estate value has been established by independent market leading property appraisers. Independently confirmed by financing institutions.”

Adler is an index company that trades on Germany’s smallcaps. It said it was currently working on a detailed reply to these allegations and will comment shortly.

BaFin (German Financial Regulator) said it is taking the report seriously, and that it would review the allegations.

Spokesperson for the office said, “If there is suspicion of criminal activity, then we will report it”

Adler shares closed at 26% less.

After Viceroy Research published a negative report last year on Grenke, a German financial services company, rumours of a quick-seller attack against Adler surfaced first in June.

Aggregate holdings, Adler’s biggest shareholder at 26.6% of Adler shares, said that it was 100% convinced about the investment in Adler.

Benjamin Lee, Aggregate’s Chief Financial Officer and CEO of Aggregate Holdings told Reuters that “the current share price doesn’t reflect the value in anyway”.

Maximilian Rienecker, Adler’s chief executive, had earlier this week told Reuters the company plans to sell a large portion of its residential portfolio to lower its debt. He also suggested that it might divest Westgrund.