Real Estate: “Suspicion of corruption crimes”: Authorities search Bavarian Supply Chamber

The Munich public prosecutor's office is searching Germany's largest supply chamber. It is the second raid by investigators this week on suspicion of corruption.

Dusseldorf. The law enforcement authorities are expanding the investigation into the investment disaster at the Bavarian Supply Chamber (BVK) and the Deutsche Finance Group (DFG): The Munich I public prosecutor's office has been searching the BVK headquarters since this morning.

As the authority announced at midday, it is investigating "suspicion of corruption offenses in connection with BVK's loss-making real estate investments in seven real estate projects in New York, Miami Beach, Beverly Hills, Chicago and San Francisco, which it carried out with the involvement of the DFG."

The background is the suspicion that managers at Deutsche Finance may have bribed BVK employees with trips and benefits.

According to the public prosecutor's office, the allegations are directed against a current and a former employee of the BVK department responsible for investments in real estate, as well as a member of the management of Deutsche Finance.

It was only on Tuesday that the investigators searched the headquarters of Deutsche Finance in Munich in connection with this. BVK had invested around 1.6 billion euros in US real estate, which was organized via Deutsche Finance fund structures.

The most famous object is the “Transamerica Pyramid” in San Francisco. As a result of the deals, BVK faces losses of up to 800 million euros. The chamber has already had to write off 163 million euros.

As the largest public pension group in Germany, BVK manages the business of twelve professional and municipal pension institutions. In Bavaria alone, around one in five households is entitled to benefits from the BVK, which manages assets worth around 122 billion euros.

The BVK has not yet responded to a short-term request from the Handelsblatt.