FRANKFURT (Reuters) - German leasing business Grenke GLJn.DE said on Monday that its founder Wolfgang Grenke would temporarily give up his seat on the supervisory board in the wake of a critical report by a short seller accusing the company of fraud.
The company also said that it was studying changes to its franchise model, which was a focus of allegations in the report.
The announcements came after short-seller Viceroy Research released a 64-page report last week in which it accused the company of malfeasance, causing its shares to dive.
The company issued a series of rebuttals during the course of last week to say that all the allegations were unfounded.
Monday’s announcement seeks to ease concerns about one of the central allegations of the report - the role of the company’s founder as well as a franchise model that helped it to expand globally.
Grenke said it would commission an independent auditing firm to examine the acquisitions of the franchises.
The Viceroy report said that the company over the years bought various franchises without disclosing that corporate insiders, including Wolfgang Grenke, already controlled those franchises and stood to profit from the transaction.
In a statement last week, the company said that, until January, Wolfgang Grenke did not own or have say over any of the shares of the vehicle that controlled the franchises, and he received no payments.
Viceroy Research had called on Wolfgang Grenke to resign or be removed from the board. Following Monday’s announcement it said on Twitter that Grenke “finally realizes it must consolidate franchisees”.
Grenke’s stock, which has lost about 44% of its value since Viceroy Research’s report was published, was down 6.7% by 0756 GMT on Monday.
Reporting by Tom Sims; editing by Thomas Seythal and Maria Sheahan
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