After The Raid On The Ministry of Finance

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SPD candidate for Chancellor Olaf Scholz is under pressure

The “governance” criterion plays an important role in ESG ratings for states. Not only credit ratings are influenced by good governance. Finance ministries have a crucial role in this.

The Osnabrück public prosecutor’s office searched the Federal Ministry of Finance in Germany this week. The Federal Ministry of Justice was also in the sights of the investigators. The background to this is an investigation against those in charge of the Financial Intelligence Unit (FIU), a special unit of customs against money laundering.

As “Spiegel” reports, German weekly news magazine published in Hamburg, there is a suspicion of thwarting punishment in the office. The FIU allegedly failed to properly forward money laundering reports from banks to law enforcement authorities.

“The FIU is a bunch of chaos. Finance Minister Olaf Scholz has not got the business under control in the past four years. That is his responsibility,” said FDP financial expert Frank Schäffler, commenting on the events.

The conditions are alarming and particularly relevant in light of the fact that the Federal Minister of Finance is currently applying for chancellorship in Germany in the federal election campaign.

A Supermarket Portfolio Not So Super

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A B (Single B) is shown on the Expo rating scale. In his Investmentcheck-News KW 36/2021, Stefan Loipfinger comes to a different conclusion, mainly due to the lack of willingness to provide information.

The Exporo classification measures the relative risk using important criteria that are of great importance when making an investment decision in the real estate sector. Points are awarded for six criteria – the more points, the higher the assessed risk. “It should be noted”, warns Exporo, “that the Exporo class represents a strong simplification of complex relationships and under no circumstances can all the risks that a property or a real estate project entails be considered. Investors should therefore not use the Exporo classification as the basis for their decision.”

“The supermarket portfolio” are securities without sales prospectus (WIB according to §3a WpPG or PRIIP). The capital is passed on to Wohninvest Holding GmbH. The project company 1, the WI Objektgesellschaft 100 GmbH & Co. KG, the project company 2, the WI Objektgesellschaft 82 GmbH, the project company 3, the WI Objektgesellschaft 84 GmbH & Co. KG and the project company 4, the WI Objektgesellschaft 98 GmbH & Co. KG the borrower to the Wohninvest group of companies. The project companies are planning to carry out renovation measures on the respective properties.

Exporo sees a “very experienced developer (Wohninvest Group) with whom Exporo has already successfully financed 12 projects, 6 of which have already been repaid.” Here are more of Exporo’s “keyfacts:

  • The traditional food retailing market is stable and, according to the Retail Real Estate Report, properties with a focus on local supplies are in great demand.
  • Established and strong tenants with constant cash flow who did not suffer any losses during the pandemic.
  • Rents are at market level and the leases are indexed; average lease term is 8 years.
  • Well-maintained condition of the portfolio; Necessary maintenance measures on the objects are factored in.
  • Abstract acknowledgment of debt in the amount of the loan.

In Stefan Loipfinger’s view, the documents provided are not sufficient for a qualified investment decision. In the opinion of Investmentcheck, in addition to the investor information sheet in accordance with Section 13 of the VermAnlG, further documents with the information of a sales prospectus as defined in Section 7 of the VermAnlG should be made available.

Investmentcheck transparency rating:

Rating: 3 out of 5.

Investmentcheck has published the company’s answers: “Thank you for your request. When presenting the existing properties and financing projects on our platform, we attach great importance to transparently providing all information that investors need for their investment decision. This information can be found publicly for each project on the respective detail page on our platform. I would therefore like to ask for your understanding that we cannot answer the standardized inquiries due to the considerable additional work involved ”.

Accordingly, “willingness to provide information” and “placement numbers” did not receive a single star at investmentcheck.de.

Failsafe Test Case To Be Averted

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Transactions of Lang & Schwarz Aktiengesellschaft are the subject of a tax audit, reports the company in a publication of inside information in accordance with Article 17 of Regulation (EU) No. 596/2014.

The subject of the tax audit is an examination of the business of Lang & Schwarz Aktiengesellschaft in the financial years 2007 to 2011 in connection with investigations under criminal tax law. In the investigation, Lang & Schwarz Aktiengesellschaft is the addressee of a request for information and disclosure. This involves the persons responsible at Lang & Schwarz Aktiengesellschaft on suspicion of unlawful offsetting or reimbursement of unpaid capital gains taxes and solidarity surcharges in share transactions on the dividend date.

Lang & Schwarz Aktiengesellschaft plays a crucial role in trading so-called “wikifolios“. Each wikifolio can, if it meets certain criteria, serve as a fictitious reference portfolio to which a wikifolio index refers.

Lang & Schwarz Aktiengesellschaft issues endless index certificates on the wikifolio index. These endless index certificates are traded on the Stuttgart Stock Exchange and can be bought and sold at almost all banks and online brokers via the Stuttgart Stock Exchange or directly from Lang & Schwarz.

Wikifolio certificates are secured. “That means,” writes wikifolio Financial Technologies AG, “defaults from an issuer risk generally associated with investments in certificates are largely hedged.” The market capitalization of Lang & Schwarz Aktiengesellschaft is currently well below half a billion euros, which affects the susceptibility to short-seller attacks. These in turn could influence the company’s credit rating.

Therefore, investors in wikifolio certificates must take into account the unlikely but possible event that a test case of the fail-safe protection of the certificates could occur.

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Artec Technologies Upgraded

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Artec technologies AG (ISIN DE0005209589) is once again awarded an eligibility status for central banks by the Deutsche Bundesbank as part of the current creditworthiness analysis.

“The credit rating is comparable to an investment grade rating from Standard & Poor’s according to the S&P’s rating scale, the credit rating for artec has been raised from BBB- (Triple B Minus) to BBB (Triple B)”, reports the company.

The balance sheets for the past three years form the basis for the credit check by the Deutsche Bundesbank. In addition, the company-specific circumstances, the current company development and the future potential are also included in the assessment. “The positioning in the competition is also analyzed”, emphasizes artec technologies.

The core of the creditworthiness analysis was the 2020 annual financial statements. During this period, artec technologies developed positively and met the forecasts. In principle, artec plans to continue its growth path in 2021 and beyond. AI-based solutions for security authorities and the media industry should continue to be the growth drivers of artec in the future.

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German Authority Gives No Mercy to Insider Trading

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On January 27, 2021, the Federal Financial Supervisory Authority (BaFin) reported an employee of the securities regulator to the Stuttgart public prosecutor on suspicion of insider trading. The employee had sold structured products with the underlying Wirecard AG on June 17, 2020. On June 18, 2020, Wirecard AG made public that it was not yet possible to obtain sufficient audit evidence about the existence of bank balances in trust accounts totaling 1.9 billion euros. The financial supervisory authority had discovered the suspicion as part of their special evaluation. BaFin immediately fired the employee and initiated disciplinary proceedings.

BaFin tightened the compliance rules for its employees’ private securities transactions in mid-October 2020. Speculative financial transactions, i.e. short-term trading, for example with derivative financial instruments or stocks, have no longer been possible since then.