Berlin, Dusseldorf The financial regulator Bafin has identified two incorrect bookings worth millions in the balance sheet for 2021 of the online trading company Social Chain AG. Its CEO Georg Kofler, 65, and ex-CEO Ralf Dümmel, 56, have become known to a wide audience as jurors on the TV show “Die Höhle der Löwen”.
While the ex-Pro-Sieben board member Kofler and his partner Dümmel once sounded out young entrepreneurs together in the talent show, they now had to answer questions themselves. The Bafin announced on Wednesday that Social Chain AG had “incorrectly recorded payments received from taking out a bank loan in the amount of 50 million euros as cash flow from operating activities”.
In the cash flow statement, the “cash flow from operating activities was 50 million euros too high” and the “cash flow from financing activities too low by the same amount”, Bafin complained. The financial data would also be distorted because the public limited company “wrongly” recorded payments of over 9.3 million euros from the sale of shares as cash flow from operating activities.
Social Chain employed up to 1300 people
Kofler has been the main shareholder of Social Chain since 2016. He has also been CEO of the listed company since the beginning of the year. When asked, Social Chain emphasized that there were allocation errors in the cash flow statement, which the company had already corrected in the 2022 annual report and consolidated financial statements. The corrections would have no effect on the cash flow or on the other components of the financial statements.
The company, which employed almost 1,300 people at its peak, describes itself as the “brand and product house of the next generation” and sells a wide range of products via social media, from porridge to fitness accessories and box spring beds.
These include, for example, the Silkslide Pro, a nose hair razor “without batteries, without electricity, without pain” for 8.99 euros or the “stylish piece of furniture for happy cats” for 199 euros called Catrub One.
Many start-ups fail because costs grow much faster than income. Ralf Dümmel in an interview in 2020
In 2016, Kofler and Dümmel appeared together in front of the camera for the first time. In the jury of the “Vox” start-up show “Die Höhle der Löwen”, they initially courted as competitors for young founders and for investments in their start-ups. At that time, Dümmel was the managing partner of the DS Group, which sold more than 4,000 products, including those from the grill manufacturer Landmann.
In October 2021, Koflers Social Chain took over the DS Group for 220 million euros, with 50 million euros being externally financed. Dümmel became the board member responsible for product, purchasing and sales. A month later, Kofler took Social Chain public. At the time, he said confidently to the Handelsblatt: “The step to becoming a unicorn is not far away.”
Driven by the hype surrounding “The Lion’s Den”, things initially seemed to be going up for the merged company. In the meantime it was worth more than half a billion euros on the stock exchange. Dümmel thought he had achieved his dreams: “As a secondary school student, I would then be on the board of a billion-dollar corporation,” he said at a New Year’s reception in early 2022.
Steep fall from social chain since 2021
From then on, however, things went steeply downhill for the joint company. For the 2021 financial year, Social Chain reported a loss of 72.5 million euros. In 2022 it was already 106.8 million euros. The share price collapsed massively in a few months: if the papers cost more than 54 euros in November 2021, they were last traded for around two euros.
>> Read also: Georg Kofler takes over as chief post
None of the men who signed the 2021 annual accounts are in office today. Social Chain AG has replaced its entire management team since June 2022. First, CFO Christian Senitz was replaced, at the end of the year the supervisory board around the main shareholder and chief supervisor Kofler replaced the other two bosses.
Kofler took over the CEO position from Wanja Oberhof at the beginning of 2023. The ex-Pro-Sieben boss apparently wants to regulate it himself and announced savings of 30 percent. “In my professional life, I have often experienced and proved that new entrepreneurial opportunities arise precisely under the pressure of crises,” explained Kofler.
Social Chain: Ralf Dümmel resigned as CEO
Ralf Dümmel resigned from his post as Director of Product, Sales and Purchasing. He will stay with the company and will take care of the management of the DS Group again in the future. In a statement, he announced that he wanted to “roll up his sleeves again, find products, drive innovation, organize sales across all channels”.
In the past, too, Dümmel was never at a loss for a tip with regard to what really matters in good corporate management: “Many start-ups fail because costs are growing much faster than income,” he said in an interview in 2020. ” That’s always the point where I say to my founders: Please pay attention! That can backfire quickly. Cost is an important issue, even if it’s annoying.”
More: After “Marriage of the Lions”: Georg Kofler takes over the top post of the troubled Social Chain AG
First publication: 07/12/2023, 4:30 p.m.