Gerresheimer's Accounting Scandal Triggers Dual Regulatory Probes

Gerresheimer faces SDAX expulsion, widened BaFin probe, and KPMG investigation over accounting issues. Stock down 68% as audits delay results until 2026.

The German pharmaceutical packaging supplier Gerresheimer finds itself at the center of a widening storm, with its stock down roughly 68 percent over the past year. The crisis, rooted in improperly booked revenues, has now ensnared its auditor and triggered its formal removal from the SDAX index, creating a perfect storm of regulatory and financial pressure.

Regulatory scrutiny is intensifying on two fronts. The Federal Financial Supervisory Authority (BaFin) has expanded its investigation beyond the 2023/24 annual report to include interim reports from December 2024 through May 2025. The probe is examining potentially misstated lease liabilities of €65.5 million and capitalized development costs of €29.4 million. Simultaneously, the auditor oversight body APAS has initiated professional misconduct proceedings against KPMG. The watchdog is investigating whether KPMG violated its duties by issuing an unqualified audit opinion for the 2024 annual report despite the emerging questions over revenue recognition.

The company’s operational calendar has been effectively wiped clean. An externally appointed audit firm is now reviewing two full financial years. A finalized and audited report for fiscal 2025 is not expected before June 2026. Consequently, a planned first-quarter update for mid-April and the Annual General Meeting, originally scheduled for early June, have been postponed indefinitely. The SDAX exclusion, which took effect today, was a direct result of the company's inability to submit an audited annual report within four months of its fiscal year-end in November 2024. Bulgarian smart device maker Shelly Group will take its place in the index.

Management is engaged in a multi-pronged effort to stabilize the company’s finances. Talks are ongoing with creditors to secure deadline extensions and prevent covenant breaches that would make liabilities immediately payable. To relieve the capital structure, the company is selling its US subsidiary Centor Inc. and closing additional US plants. While the index exclusion itself was largely anticipated, triggering a modest 2.8 percent drop in the share price today, earlier revelations caused severe sell-offs. On February 11, the stock plunged approximately 30 percent in a single session as new details of the accounting crisis emerged.

Amid the turmoil, a notable vote of confidence emerged this week. US investment bank Morgan Stanley reported crossing the 3 percent reporting threshold, building a significant position as of April 2. This institutional interest provides a counter-narrative to the pervasive negative sentiment. For now, however, the stock trades at multi-year lows, stripped of a reliable valuation basis until the audits and regulatory investigations conclude. The path to a potential re-rating hinges entirely on the clarity promised for June.