ISS Backs Elliott Push for Special Audit on Deutsche Wohnen Loan

Institutional Shareholder Services Inc. is backing Elliott Investment Management’s call for a special audit of real estate firm Deutsche Wohnen SE’s loan to its controlling shareholder, its second recent move to support activist proposals in Germany.

Deutsche Wohnen’s loan of as much as €2 billion to Vonovia SE “raises legitimate concerns about potential conflicts of interest and breach of fiduciary responsibilities,” ISS said in a note. Vonovia took control of Deutsche Wohnen in a 2021 deal. While there’s no irrefutable evidence of wrongdoing, an independent investigation by a third-party special auditor would merit shareholder support, it said.

Elliott, which ...