Zalando shares tumbled in early European trading after Germany's financial regulator, BaFin, announced it has opened a formal investigation into the company's annual financial statements and management report.
The probe was triggered by what BaFin described as concrete indications that the DAX-listed e-commerce group may have breached accounting regulations.
The investigation focuses on the integrity of the reported figures, raising questions about the reliability of Zalando's recent financial disclosures.
The regulator's intervention marks a significant escalation in scrutiny for the online retailer, which has faced mounting pressure to demonstrate financial discipline amid a challenging macroeconomic environment.
The news sent shockwaves through the market, with investors rapidly repricing the stock on fears of potential restatements or fines.
The investigation focuses on the integrity of the reported figures, raising questions about the reliability of Zalando's recent financial disclosures.
For traders, the immediate risk is heightened volatility and potential liquidity constraints as institutional investors reassess their exposure.