(Bloomberg) -- Germany's financial markets regulator said it will probe Grenke AG's accounts, opening a third investigation of the leasing company after facing criticism for its handling of the Wirecard AG scandal.
The company's financial statements for 2019 are the subject of the probe, BaFin said on Wednesday. It will look at Grenke's account balances with central banks and lenders, among others, according to a statement from the regulator.
BaFin had started an investigation into Grenke's bank on Monday and was already looking at whether the company or other parties manipulated the price of its securities.
Short-seller Fraser Perring's Viceroy Research Group this month sent Grenke's shares on a rollercoaster with allegations that the company used acquisitions to hide that much of its cash doesn't exist. The company has called Perring's allegations “completely unfounded” and mandated two special audits.
For its latest probe, BaFin took over an investigation from the Financial Regulatory Enforcement Panel -- a thinly-staffed private-sector watchdog known by its German initials DPR -- as the regulator is trying to close gaps in the country's accounting oversight that were laid bare by the Wirecard failure. The payments company was the target of fraud allegations for over a year, but authorities failed to detect the issues in part because supervision was split between different authorities.
BaFin will also look at Grenke's disclosures on “relations and business transactions with related persons or companies,” it added.
Germany is one of relatively few countries to split accounting enforcement between a private-sector watchdog and the markets regulator. Since Wirecard's collapse, the Finance Ministry says BaFin needs investigative powers, and the Justice Ministry canceled its contract with DPR, which will now expire at the end of next year.
Grenke assured full transparency and cooperation with the regulators on Monday when it disclosed the banking probe.
Bloomberg reported earlier this month that the watchdog was considering an accounting probe.
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