Gerresheimer’s Accounting Crisis Deepens as Regulators Circle KPMG and Morgan Stanley Trims Its Stake

Morgan Stanley reduces Gerresheimer stake below 5% amid conflict concerns, as APAS investigates KPMG over alleged IFRS violations in 2024 audit.

The turmoil at Gerresheimer is escalating on multiple fronts. Just as the US investment bank Morgan Stanley cut its holding below a key reporting threshold, Germany’s audit watchdog APAS launched professional proceedings against KPMG for allegedly signing off on a flawed 2024 annual report. The developments mark a fresh chapter in a saga that has already seen a BaFin probe, a delayed financial statement, and a planned factory closure.

Morgan Stanley disclosed on April 30 that its stake had fallen to 4.74% from 6.01%, crossing the 5% notification threshold on April 24. The timing raises eyebrows: the bank is simultaneously advising Gerresheimer on the sale of its US subsidiary Centor, a potential conflict of interest that has market participants questioning its positioning. The reduction came just days after Barclays analyst Jonathon Unwin downgraded the stock from “Equal Weight” to “Underweight” on April 27, slashing the price target from €23 to €19 amid concerns over strategy, capital structure, and the ongoing regulatory investigations.

The APAS action against KPMG adds a regulatory dimension that was absent before. The audit oversight body is examining whether KPMG, which replaced Deloitte as Gerresheimer’s auditor only in 2024, improperly issued an unqualified opinion on the 2024 financial statements despite what are now described as systematic IFRS violations. The case is particularly sensitive because it strikes at the credibility of the audit process itself at a time when the company can least afford additional scrutiny.

At the heart of the crisis are three specific allegations from BaFin, which launched a review of the interim consolidated financial statements on March 6. Leasing liabilities of €65.5 million are said to be incorrectly stated. Capitalized development costs with a carrying value of €29.4 million carry misstated useful lives. And assets in the Advanced Technologies segment, with a book value of roughly €196 million, were not properly impaired. The original trigger was a series of “bill-and-hold” transactions — Gerresheimer invoiced customers for goods but delayed delivery, booking revenue prematurely in contravention of IFRS rules. An independent law firm confirmed the systematic nature of the violations, which affect €35 million in revenue and €24 million in adjusted EBITDA.

The operational picture, however, tells a different story. Management is sticking to its full-year guidance: revenue between €2.3 billion and €2.4 billion, with an adjusted EBITDA margin of 18% to 19%. Day-to-day business is described as running within expectations, with solid order books, particularly in drug delivery systems like syringes and inhalers. The stock rose nearly 5% on the day to €24.44, extending a 30-day recovery of almost 24% — though it still trades roughly 60% below its year-ago level.

The structural problem remains the absence of a signed-off annual report. Without it, many institutional investors cannot touch the stock. STOXX has already ejected Gerresheimer from the SDAX index after the company missed the publication deadline. The annualized 30-day volatility stands at around 90%, making it one of the most jittery names in German healthcare. The shares currently trade at €24.18, roughly 60% below their 52-week high and well under the 200-day moving average.

Management is pursuing a two-pronged strategy to stabilize the balance sheet. The sale of Centor, which makes packaging systems for prescription drugs, is the centerpiece. A double-digit number of bidders are said to be circling, with a deal still expected in 2026. Morgan Stanley is advising on the transaction. Separately, the glass plant in Chicago Heights will close in September 2026, affecting around 170 employees, with production shifting to facilities in Italy and India.

The critical date is June, when Gerresheimer plans to release both its audited 2025 annual report and its first-quarter 2026 results. Creditors have agreed to extend the deadline, signaling continued support for the restructuring. The half-year report is scheduled for July 14. Until then, the stock remains in limbo — rallying on hope, but vulnerable to the next shock. The June filing will reveal how deep the accounting corrections really go, and whether the recent price recovery has any foundation beyond short-covering and speculative bets.