The real estate group is also being criticized for its decision to put all new construction projects on hold for this year.
(Photo: imago images/Ina Fassbender)
Frankfurt Investigators searched the headquarters of Germany’s largest housing group Vonovia on Tuesday. The police and prosecutors are investigating suspicions of a possible corruption scandal, as the Dax 40 group announced. “Today, the investigative authorities looked at our documents because Vonovia apparently suspected problematic processes in the awarding of contracts to subcontractors,” said a spokeswoman for the company in Bochum.
The public prosecutor’s office in Bochum informed the Handelsblatt that, together with the State Criminal Police Office of North Rhine-Westphalia and the tax offices for criminal tax matters and tax investigations in Düsseldorf, Bochum and Münster, investigations are being carried out against two housing companies based in Bochum and southern Germany.
The reason is “the suspicion of corruption and bribery in business transactions, breach of trust, fraud and other criminal offenses against several (former) employees of the Bochum-based housing company, people from their environment and those responsible for several companies that have a business relationship with the housing company or stood”. Among other things, bills of quantities are said to have been manipulated in order to enable the commissioned companies to bill excessively or for services not rendered. According to the public prosecutor’s office, four arrest warrants were executed.
Vonovia wants to cooperate
As the injured party, Vonovia cooperates fully with the authorities and grants them access to the necessary documents. “We are very interested in a quick and comprehensive clarification of the allegations,” emphasized the spokeswoman. The WDR and the “Süddeutsche Zeitung” were the first to report on the raid.
According to the public prosecutor’s office, more than 40 properties were searched and four arrest warrants executed on Tuesday in North Rhine-Westphalia, Baden-Württemberg, Hamburg and Saxony as part of the investigation. Further details could not be given. Investors were shocked by the news: the Vonovia share fell by around five percent at times, but recovered somewhat in the course of trading.
Vonovia is Europe’s largest private housing company – and thus an important client in the industry. The group owns almost 550,000 apartments in Germany, Sweden and Austria. There are also around 72,400 managed apartments.
Vonovia invests billions in building modernization and maintenance every year. In this year alone, the group originally planned investments of 2.3 billion euros for energy modernization, improvement of living standards and new construction, before it significantly reduced the plans due to the difficult situation on the real estate market.
Current situation makes bribery proposals vulnerable
The investigations come at a sensitive time for Vonovia. The group will present its preliminary annual figures on March 17 and was recently criticized for announcing that it would put all its new construction projects on hold in the current year due to the increased financing costs.
Tenant initiatives have been criticizing the company for a long time because rents are too high. The IG Bau union recently called for Vonovia to be expropriated. The company also came under criticism when the management announced, despite the housing shortage in Germany, that it would not start any more new construction projects in the current year.
Vonovia cited increased costs and an uncertain situation regarding federal funding conditions as the main reason. However, the development work has not been stopped, but is still striving for building permits in order to be ready to start as soon as the general conditions are right again. In addition, the group wants to focus more on prefabricated parts, modular construction and serial wood-hybrid construction in the future, which is also the purpose of its participation in the start-up Gropyus.
The bottlenecks in the housing market make the situation difficult for many craft businesses and tenants – and obviously make those affected susceptible to proposals for bribery. The public prosecutor’s office in Frankfurt is also investigating in several cases of corruption in the allocation of apartments against employees of the Frankfurt housing company ABG, which is majority owned by the city, as well as against agents and tenants.
Employees are suspected of being guilty of preferential allocation of ABG rental apartments in exchange for bribes. After an indication of a possible benefit, the housing company immediately filed a complaint.
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