Activist hedge fund Elliott Investment Management wants a Berlin court to order a special audit into a large loan provided by German landlord Deutsche Wohnen SE to its controlling shareholder Vonovia SE last year, according to a report by Bloomberg.

The report cites unnamed sources with knowledge of the matter as confirming that Elliot has asked Landgericht Berlin to appoint an auditor to investigate whether Deutsche Wohnen’s supervisory board failed to act in the best interest of investors when it approved lending as much as €2bn ($2.1bn) to Vonovia SE.

In its motion to the Berlin court, Elliott claims that the money was used to help Vonovia repay some of the bridge loans that it had taken out to finance its multibillion-euro acquisition of Deutsche Wohnen in 2021, which amounts to illicit financial assistance.

Elliott along with a small number of other investors didn't tender tender shares in the sale to Vonovia, in the hope of achieving a higher price.

According to a spokesperson for Deutsche Wohnen, the company is examining the contents of Elliot's application to the court.