Elliott Investment Management wants a Berlin court to order a special audit into Deutsche Wohnen SE over a large loan the German landlord made to its controlling shareholder, people with knowledge of the matter said.

The US hedge fund has asked Landgericht Berlin to appoint an auditor to look into its claim that Deutsche Wohnen’s supervisory board failed to act in the best interest of investors when it approved lending as much as €2 billion ($2.1 billion) to Vonovia SE last year, according to the people.

Elliott said the money helped Vonovia repay some of the bridge loans that the real estate group took up to finance its multibillion-euro acquisition of Deutsche Wohnen in 2021. In its motion to the Berlin court, the hedge fund said the loan therefore amounted to illicit financial assistance and was approved too quickly.

Elliott is one of a small number of Deutsche Wohnen investors that didn’t tender its shares in the sale to Vonovia, as it was holding out for a higher price.

At its annual general meeting in June, Deutsche Wohnen said Vonovia already had ample funding in place for its takeover and had not required extra help. Deutsche Wohnen management said Vonovia only borrowed €1.45 billion of the maximum loan agreed.

The full loan amount was approved by three Deutsche Wohnen supervisory board members in January 2022. Another three abstained from a vote on the loan as they were also executives at Vonovia. But Elliott said two of the board members who agreed — Simone Schumacher and Peter Hohlbein — were affiliated with Vonovia as well, according to the people, who asked not to be identified discussing confidential information.

Schumacher worked as member of Vonovia Finance B.V.’s supervisory board at the time of the vote, according to her LinkedIn profile and a Deutsche Wohnen filing. Hohlbein was one of the representatives Vonovia elected to the supervisory board of Victoria Park AB after acquiring the Swedish landlord in 2019. Hohlbein left Victoria Park in 2020 according to a Deutsche Wohnen filing.

A spokesperson for Deutsche Wohnen said the company is examining the contents of Elliott’s application to the Berlin court. Representatives for Landgericht Berlin, Elliott and Vonovia declined to comment.

Earlier this year, the influential proxy advisory firm Institutional Shareholder Services Inc. backed Elliott’s call for a special audit of Deutsche Wohnen over the loan.