(Bloomberg) -- As Adler Group SA hit six months without an auditor, it got a fresh critique that may make the search for a new one even harder. 

Germany’s financial regulator said Thursday that Adler’s 2019 annual report contained accounting errors, marking the second time it identified flaws in the firm’s books. The BaFin statement comes a few months after the watchdog accused Adler of overstating the value of an asset it tried to sell and six months to the day since KPMG quit as the landlord’s auditor. 

“To the best of our knowledge, there’s no comparable case where a publicly listed company was unable to find an auditor for so long, at least not in the recent past,” said Klaus-Peter Naumann, head of the Institute of Public Auditors in Germany, a standard-setter for the industry. Adler’s “specific risk profile” is likely among the reasons for this, Naumann said.

The landlord said it does not share the regulator’s view and is appealing the decision, as it did with BaFin’s August finding. 

Adler vowed to find a new auditor when KPMG quit on May 17 but has so far failed to do so. A tender in June didn’t produce any results and the firm has since started reaching out to audit firms directly, it said during its second quarter earnings call in August. It’s due to report third-quarter results on November 29.

The company has until the end of April to publish an audited annual report and is currently seeking an extension on that deadline, Bloomberg has reported. A covenant for audited financial statements is included in the terms of bonds issued by Adler Group, but not by its Adler Real Estate subsidiary, according to Tobias Moser, a lawyer at DMR Legal who is advising some creditors.

KPMG’s decision in May to drop Adler as a client came after it refused to give an opinion on the company’s 2021 accounts and said its audit report on Adler’s 2020 financial statements should no longer be relied on. KPMG’s quitting caused Adler’s share price to plummet by 12.5% in a day and deepened the turmoil that the firm has been in since a short seller issued a scathing report on it a little over a year ago.

--With assistance from Laura Benitez.

©2022 Bloomberg L.P.