February 3, 2014 / 7:28 AM / in 4 years

UPDATE 1-TAG Immobilien says external audit clears CEO

* PWC conducted audit from October to mid-January

* Audit invalidated allegations of conflict of interest

* PWC found CEO’s private deals had board’s approval

* Shares indicated 0.7 percent higher

FRANKFURT, Feb 3 (Reuters) - German real estate group TAG Immobilien AG said an external audit has cleared its chief executive of allegations of poor judgment in some of his business decisions.

German weekly Welt am Sonntag had said in October there had been a possible conflict of interest in some of CEO Rolf Elgeti’s property transactions and that the company had overpaid on other deals.

TAG said in a statement on Monday that auditing firm PricewaterhouseCoopers (PWC) “has completely invalidated the allegations... and has completely refuted the negative assertions”.

The newspaper had said in October that Elgeti’s private investments in various companies buying and managing real estate comprised a conflict of interest with TAG, citing specifically the purchase of a high-rise in the northern German city of Rostock by a company in which Elgeti holds a stake.

TAG’s stock lost almost 10 percent of its value following the report and is still below the level at which it traded before its publication. Shares in TAG were indicated to open 0.7 percent higher on Monday.

TAG said that PWC found in its audit, which ran from October to mid-January, that Elgeti’s private real estate transactions were covered in his employment contract and were made with the supervisory board’s approval.

“PWC found no evidence of exertion of influence by Mr Elgeti regarding purchase decisions, nor of conflicts of competition and/or interest,” it said.

TAG and Elgeti had previously denied the allegations, and Elgeti has transferred his private real estate business and holdings in property companies to a trustee to show there is no conflict of interest.

“I‘m glad that these allegations, which were untenable from the beginning, have now been disproved by an independent agent as well,” Elgeti said in the statement.

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