Grenke rebuilds after allegations of fraud

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Grenke headquarters in Baden-Baden: Corona crisis weighs on profits

Photo: Uli Deck / dpa

The leasing group Grenke draws consequences for its strategy after the attack by a British investor.

In the next twelve to 18 months, the franchise companies should be integrated into the group, said Grenke.

In addition, the board of directors will be increased by a risk manager.

Board member Sebastian Hirsch will therefore be the head of finance in the future and company boss Antje Leminsky will also be responsible for internal auditing.

This should create more transparency for the capital market, said Leminsky.

In mid-September, the investor Fraser Perring accused Grenke of fraud, money laundering and falsification of the accounts - and at the same time bet on a crash of the shares.

Grenke defends himself against the claims, but has not really taken his foot off the stock exchange.

The shares listed in the MDax cost around 32 euros, only half as much as before the allegations were published.

The balance sheet scandal with the payment provider Wirecard is in the bones of investors.

The former Dax group had inflated its balance sheets for years.

In June he filed for bankruptcy, and investors lost billions.

Perring also made allegations of manipulation against Wirecard at an early stage.

Grenke specializes in the rental of IT equipment and office equipment and employs 1700 people in 33 countries.

When expanding into new markets, the Baden-Baden group has been using a franchise model since 2003, which is at the center of Perring's allegations.

"Very successful for almost two decades"

In new countries, franchise companies are founded by a manager from within their own ranks; the companies are financed by an external investor.

Grenke can take over this company after a certain period of time.

The 16 franchise companies that have not yet been bought are now to be integrated quickly.

For this, Grenke will prepare independent valuation reports.

"We have been very successful in expanding through franchise companies for almost two decades," said Hirsch.

"We want to continue this success, but with Grenke startups without external financial investors."

The Perring attack did not have any notable effects on ongoing business, said Leminsky.

Business in the third quarter was primarily burdened by the corona crisis.

New business fell by 19 percent to 704.1 million euros, while profit dropped by half to 17.7 million euros.

The financial supervisory authority BaFin is investigating Perring's allegations and is currently researching Grenke's balance sheets.

The group itself has commissioned several special audits.

Final results are not yet available.

Most recently, Grenke had stated that the results so far showed no abnormalities.

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