[ad_1]
Financial regulator Bafin wants to examine processes at leasing company Grenke. The agency said it was investigating allegations of market abuse made in a report by investor Fraser Perring. It analyzes possible market manipulations by Grenke AG, for example through incorrect information on accounting matters. Also, investigate if there has been any possible manipulation by third parties in the form of a short sale attack. Additionally, suspicions of insider trading will be reviewed prior to the publication of the Perring report.
The British investor had previously made accusations against the leasing company Grenke in a 64-page report and bet on a price drop with borrowed shares. He explained it himself in the published document written by his company Viceroy Research.
According to information from SPIEGEL, Perring had submitted his criticism in writing to Bafin in early August and had asked the authorities to investigate Grenke. The investor claims to have sent both letters to Bafin by mail and has yet to receive a response. The Bonn authority said it had not yet received a letter or email from Perring.
Short selling attack causes prices to fall
Specifically, Viceroy Research accuses the provider of leases and other financial services of having inflated the balance sheet and having made excessively high profits and cash. Grenke bought overvalued companies from affiliated companies. The group sets too high values on the balance sheet of the acquired companies and therefore keeps profits artificially high.
The group, in which the Grenke family has a substantial stake, rejects the allegations against SPIEGEL. Grenke did not violate accounting standards or principles, buy affiliated companies, pay too much for the companies, or get rich.
The company’s shares listed on the MDax fell nearly 20 percent to their lowest level in five years on Tuesday. The market value of the company fell by more than 700 million euros.
Short selling is a common practice in the stock market. Experts even consider them an important tool to make the stock markets perform better. In this type of trading, investors sell securities that they have previously borrowed from other market participants for a fee. If the share price falls before the payback date, you can buy the cheapest shares on the market and collect the difference. If the price rises, the short sellers face losses.
