German pension fund Versorgungswerk der Zahnärztekammer Berlin (VZB) has filed a lawsuit against 12 parties, including Forvis Mazars, Deutsche Apotheker- und Ärztebank (ApoBank) and the state of Berlin, seeking damages for losses incurred on private market investments.
The pension fund for dentists in Berlin, Bremen and Brandenburg announced yesterday that the lawsuit, spanning more than 2,000 pages, was filed ths week before the Regional Court Berlin II.
VZB is seeking to establish liability for damages against 12 defendants, including former members of the pension fund’s supervisory and management committees.
Forvis Mazars is accused of alleged breaches of duty linked to work relating to annual financial statements between 2014 and 2022.
ApoBank is being sued over risk analyses and asset/liability management (ALM) studies, which, according to VZB, were worthless and failed to identify investment risks.
According to the pension fund, the bank adopted VZB’s investment ratings directly and without scrutiny.
The “striking clustering of identical ratings”, BBB- or just barely investment grade, is “both statistically unusual and, from today’s perspective, implausible”, VZB said in a statement.
Experts concluded that the vast majority of the investments did not qualify as investment grade and therefore breached the Insurance Supervision Act, the Investment Ordinance and VZB’s internal investment guidelines, the pension fund added.
The lawsuit also targets the state of Berlin for alleged breaches of supervisory duties, as well as six former members of the supervisory committee and three former members of the management committee, including former chair Ingo Rellermeier.
Under Rellermeier’s leadership, VZB alleged that assets were invested over more than a decade in breach of laws and internal guidelines.
“The assets flowed into high-risk, illiquid equity stakes, such as in start-ups, some of which have since gone insolvent. All oversight bodies failed to detect and halt this unlawful practice,” the pension fund said.
The Berlin departments of health and economic affairs, both responsible for oversight of VZB, declined to comment, stating that the matter is currently under litigation.
“We firmly reject any alleged complicity in the reported losses of the VZB,” ApoBank told IPE.
The lawyer representing Rellermeier declined to comment.
Forvis Mazars said it had conducted a comprehensive internal review of the financial statement audits as a precautionary measure.
“We can state that we have nothing to blame ourselves for,” the audit firm said, adding that it had not yet received VZB’s complaint.
Potentially higher losses
According to VZB, losses could ultimately exceed more than half of its €2.2bn in assets, meaning the precise amount of damages sought has not yet been determined.
“Pursuing claims for damages is now the only way to recoup at least a portion of the losses and safeguard pension entitlements,” said chair Thomas Schieritz.
VZB expects that, given the scale of the damages claimed, the defendants will exhaust all three levels of appeal and that proceedings could last several years.
The pension fund is also pursuing claims against Grand Metropolitan Hotels Holdings in proceedings before the Enterprise Chamber in Amsterdam, as well as against Baker Tilly.
