TAG Immobilien AG will hire a law firm or auditor to carry out an external review of accusations made in a newspaper report about its chief executive officer after the shares fell 9 percent in two days.
The review will be done by a firm with no connection to TAG “to clarify and dispel the accusations,” the Hamburg-based company said in a statement today. Welt am Sontag reported on Oct. 6 that TAG CEO Rolf Elgeti owns stakes in about 20 companies that buy and manage real estate like the company he heads. Elgeti also bought commercial properties himself, the newspaper said.
“We should have provided more transparency on that matter,” Elgeti said on a call with analysts today. The CEO, responding to speculation he may quit, said there were no conflicts of interest and that all of TAG’s management board members support him “100 percent.”
Elgeti became CEO in July 2009 after joining the supervisory board the previous year, and last year his contract was extended through 2017. The board was told about all the transactions Elgeti made outside TAG and cleared them, Elgeti said in an e-mail to Bloomberg on Oct. 7. Most of the deals were done before he joined TAG, Welt am Sonntag said in its report.
TAG climbed 1.8 percent to 8.55 euros in Frankfurt trading, the biggest intraday gain since Aug. 6. They closed at 9.24 euros on Oct. 4, the last trading day before the newspaper report. The company has a market value of 1.12 billion euros.