German real estate group Vonovia has announced that it will engage global advisory firm Deloitte to perform an independent investigation into allegations that a number of its current and former employees engaged in bribery and corruption schemes.
The housing giant has been rocked by the accusations of bribery and corruption, breach of trust, and fraud, with German police launching early March raids on up to forty residential and business properties, including the company’s offices. The accused Vonovia employees and ex-employees, as well as individuals working for the real estate company’s contractors, are alleged to have exchanged cash and other benefits for preferential treatment to certain companies bidding for contracts. The investigation will be conducted by Deloitte’s forensic service line, which specializes in handling compliance breaches and white-collar criminal behavior.
The Bochum public prosecutor’s office and the NRW state criminal investigation office maintain that no accusations are being made against the company itself, and its executives have vigorously protested its innocence, maintaining that the company itself is a victim. “We are shaken. Apparently, individual employees at our subsidiaries allowed themselves to be bribed to the detriment of Vonovia - that is unacceptable,” explained Vonovia Chief Executive Officer Rolf Buch, who further claimed that the company has taken “initial measures” against the accused employees and would be filing further charges of its own while cooperating fully with the investigating authorities.
Vonovia, a multinational real estate company based in Bochum, North Rhine-Westphalia, maintains extensive real estate holdings in Germany, Sweden, and Austria, and controls an extensive share of the housing market in the German capital Berlin. The company has expanded aggressively in recent years, fueled by a tight housing market and skyrocketing rents. In 2018, its acquisition of Conwert Immobilien and BUWOG made it the leading real estate group in Austria, and its $32.11 USD purchase of the majority of shares of Deutsche Wohnen in 2021 gave it extensive control over housing markets in areas like Berlin. Rising inflation and surging mortgage interest rates have driven the company’s stock down from its 2021 heights, and the recent allegations have pushed it even lower.
