Siegen, Germany – Prosecutors have launched an investigation into the chief executive of Diakonie Südwestfalen, one of the largest social welfare organizations in the region, over allegations of false statements in the company’s annual financial statements. The investigation centers on the non-disclosure of liens related to multi-million euro loans, according to a statement released Monday by the Siegen public prosecutor’s office.
The probe, led by Senior Public Prosecutor Patrick Baron von Grotthuss, is proceeding under Section 331 of the German Criminal Code (HGB), which addresses intentional misrepresentation in financial reporting. A conviction under this statute carries a potential penalty of up to three years in prison or a monetary fine. “The initiation of proceedings against the managing director is due to a preliminary suspicion based on paragraph 331 HGB, specifically due to the fact that the annual financial statements of Diakonie gGmbH did not disclose the liens on the properties,” von Grotthuss stated.
A Grundschuld, a type of German land charge, functions as security for a loan, granting the lender a claim on the property if the borrower defaults. The practice is common in Germany, where banks often require such charges when issuing loans. According to legal experts, the failure to disclose these liens in the financial statements raises concerns about transparency and potential attempts to obscure the organization’s financial position.
Dr. Christian Schleifenbaum, Chairman of the Diakonie’s administrative board, acknowledged the omissions in a written statement to WDR, characterizing them as unintentional. “The financial statements of Diakonie Südwestfalen have always been prepared correctly, disclosing all assets and liabilities, including all quantified loans, and have always received an unrestricted audit opinion. The inadvertently missing information regarding the collateral for individual loans, which are fully disclosed in the balance sheets, will be supplemented,” Schleifenbaum said.
The Evangelical Church District of Siegen-Wittgenstein, one of two sponsoring bodies of Diakonie Südwestfalen, has declined to comment further on the matter, deferring to the Diakonie’s previous statement and stating it will await the outcome of the investigation.
Diakonie Südwestfalen employs approximately 4,000 people and provides a wide range of social services throughout the region. The investigation was prompted by reports in the Siegener Zeitung newspaper. Von Grotthuss indicated that the investigation will determine whether the CEO was directly responsible for the omissions.
According to reporting from idea.de, von Grotthuss is also currently involved in an ongoing investigation into separate allegations of abuse within the Siegen-Wittgenstein church district, though he stated that investigation has not yet yielded any evidence of criminal relevance.
