Shares of the struggling Adler Group fell 45% on Monday morning following KPMG’s refusal to sign off on the German property company’s financial results and the resignation of half of the board over the weekend.

Despite KPMG’s refusal to approve its 2021 results on Friday, Adler announced a net loss of 1.2 billion euros on Saturday after it canceled 1 billion euros from its property development operations and revealed that it could not raise additional funds as the impairment triggered a covenant breach. .

However, Adler said he did not breach an obligatory clause regarding his obligation to publish audited financial results by April 30, arguing that he met that requirement despite KPMG’s disclaimer.

Adler, which has battled short-seller allegations for the past few months, was in danger of missing a crucial Saturday deadline for its earnings release, which would have left 4.4 billion euros in bonds due immediately, said President Stefan Kirsten.

“In this case, the company had hit a wall,” Kirsten told reporters on a call Monday.

He pointed out that the annual report complied with the covenants despite KPMG’s decision not to approve the results. “There was an audit, and we checked the results,” Kirsten said.

The Big Four firm said Adler’s management “denied us access to certain information” and therefore was unable “to obtain sufficient and appropriate audit evidence.” At issue were a number of transactions Adler entered into with third parties that the short sellers claimed were not independent.

KPMG stressed that it was unable to assess “whether the accounting treatments for at least some of these transactions are appropriate and consistent with their substance.” He also warned that he could not assess “whether management’s assessment of the valuation of certain account balances is adequate.”

On Saturday, Kirsten said she was “surprised” by the strength with which KPMG had expressed her opinion. Hours after the company released its annual report with auditor disclaimer, the company announced the immediate resignation of co-chief executive Maximilian Rienecker and three other board members.

Kirsten, who joined the company in February, said he was assessing whether former board members breached their fiduciary duties. The president told reporters he currently sees no evidence of criminally relevant misconduct.

KPMG’s refusal to sign off on annual results came a week after a separate team of forensic investigators from firm Big Four discovered widespread governance and compliance shortcomings.

Forensic investigators found ample evidence that Cevdet Caner, a controversial real estate tycoon with no formal role in the company, had significant involvement in strategic decisions, executive hiring and compensation, as well as d other operational matters.

KPMG’s forensic team stressed that they were unable to get to the bottom of some of the allegations. She could not have access to 800,000 documents deemed relevant because her client invoked “legal reasons”.

The forensic investigation was commissioned by the board in October after short-selling group Viceroy Research, led by Fraser Perring, accused the company of widespread fraud, improper dealings with related parties and accounting manipulations. Adler denied any wrongdoing. Over the past year, Adler shares have lost about 70%.