Hendrik Holt is currently the subject of a worldwide manhunt after failing to return to open custody following authorized leave at the end of August. His case originally became famous for another reason, however: the former wind power entrepreneur sold projects to international energy companies that, in some cases, did not exist at all. The Osnabrück Regional Court later found that Holt and his co-defendants had defrauded three foreign state-owned energy companies of around €10 million. The more astonishing question remains: How do you sell professional buyers a wind farm that exists only on paper?
A wind farm does not need to have a single turbine yet
To understand the fraud, one first has to resolve an apparent contradiction. Buying a wind farm does not necessarily mean buying a finished facility with foundations, towers and rotor blades.
Especially in the case of so-called early-stage projects, developments are traded long before construction begins. At that point, their economic value lies in land rights, planning progress, potential grid connections, permits and the prospect that the project can eventually be built.
At an early stage, a wind farm therefore consists to a considerable extent of something that is easy to underestimate:
Paper.
Or today: files in a digital data room.
Holt had initially operated legitimately in exactly this market. According to later findings and reports, his group was still selling genuinely existing wind power projects in 2017. Only afterwards did Holt and his then finance director develop the model further and eventually bring projects to market that were not real.
That made the deception more plausible. The seller had not appeared out of nowhere. He had already completed genuine transactions and operated in an industry in which buyers initially acquire rights and development prospects rather than a finished physical asset.
Documents became assets worth millions
The buyers were not inexperienced small investors.
The victims were the state-owned energy companies ČEZ of the Czech Republic, Enel of Italy and SSE of Scotland. They signed project agreements with the Holt Group worth around €10 million in total.
To demonstrate the existence and development status of the projects, documents including land-use agreements, letters of support from municipalities and confirmations from grid operators were presented. The problem was that some of those documents had been forged.
During the investigation, authorities even spoke of more than 1,000 forged signatures on municipal letters, lease agreements and other documents. In some cases, identical projects were offered to several interested buyers.
For a time, the actual asset consisted solely of a convincing chain of assertions:
- The land has been secured.
- The municipality supports the project.
- A grid connection is possible.
- The next development milestone has been reached.
- Each individual piece of information appeared to increase the project’s value.
And once enough of these elements fitted together, buyers could treat the result economically as if it were a real wind power project.
Some of the forgeries were not even particularly good
This is where the case takes on another dimension. According to the insolvency administrator’s account of the court’s findings, some of the forgeries were so amateurish that they could have been detected upon closer inspection.
Holt himself said during the trial that he had sometimes submitted poorly forged documents and had been surprised that they were not detected even during reviews by prestigious law firms.
His explanation at the time was essentially that buyers were primarily looking for projects and market share. Demand for wind projects among major energy companies had been enormous, while actually bringing such projects to completion had become increasingly difficult.
That is, first and foremost, the account of a convicted fraudster, not an independent analysis of why his scheme succeeded. But the court case does raise a genuine question: Why did professional control mechanisms not work sooner?
Prestigious law firms were involved – but they were not responsible for everything
Major international commercial law firms were involved in the transactions.
CMS advised SSE on an early-stage acquisition of a portfolio from the Holt Group. Weil Gotshal & Manges acted for ČEZ, while Enel reportedly worked with Linklaters. The Holt Group itself also consulted lawyers from Görg.
At first glance, that sounds like a control network through which a fictitious project should hardly have been able to pass. But corporate due diligence does not automatically work on the principle that one law firm checks everything.
Görg later told legal industry publication JUVE that it had not been instructed to conduct vendor due diligence. The Holt Group had said it had its own team for that purpose. The lawyers had no access to the data room containing the documents later identified as forged.
Nor, according to Görg, was it part of its mandate to verify whether certain project milestones had actually been reached. That was the responsibility of the buyer side. This reveals a classic problem in complex transactions:
Many highly qualified people each examine one part of a deal.
Yet ultimately, someone would need to ensure that the overall picture actually corresponds to reality.
Due diligence is only as good as its mandate
There were apparently limits on the buyer side as well.
One law firm involved in the transactions told JUVE that companies sometimes request only a reduced form of due diligence for cost reasons. Competitive bidding processes can also create considerable time pressure, meaning that not every document is examined comprehensively.
That is no excuse for losing millions. But it illustrates an important difference between what outsiders imagine a corporate review to be and what actually takes place.
“Due diligence conducted” does not necessarily mean that every assertion has been independently verified at its original source. The scope depends on the mandate, time, costs, responsibilities and the perceived level of risk.
A legal adviser, for example, may examine whether a contract is legally sound without being responsible for verifying whether the person whose signature appears on it actually signed it.
It is precisely at such interfaces that vulnerabilities can emerge.
The market itself helped the deception
The economic environment also played a role. Germany was in the midst of expanding renewable energy. Project developers able to offer attractive wind sites with a realistic prospect of approval controlled something scarce.
Demand for such projects was high, while planning and permitting were becoming increasingly difficult. Holt was therefore not offering just any product. He was offering major energy companies exactly what they were looking for: a pipeline of supposedly developable wind farms.
The ARD documentary about the case also describes how Holt portrayed himself as a successful entrepreneur, cultivated contacts in political and social circles and was perceived as a rising player in the energy transition.
Such an image is obviously no substitute for verification. But it can influence how plausible a deal initially appears.
Trust often emerges from many small signals
Business fraud therefore does not always work because a perpetrator tells one perfect lie. Credibility often emerges from numerous elements that each appear plausible on their own.
- A company exists.
- Business partners know it.
- Lawyers are working on contracts.
- Documents are stored in professional data rooms.
- A managing director can speak knowledgeably about the industry.
- Previous transactions were genuine.
- Other major companies are interested as well.
The individual document then becomes part of an apparently coherent overall picture. The Holt case demonstrates why that overall picture itself can become dangerous:
Plausibility is not proof.
What companies can learn from the case
The practical lesson is not that companies should automatically distrust every project developer in future. At its core, the lesson lies in making a clearer distinction between three things:
- Verify the documents.
- Verify the responsibilities.
- Verify reality.
When particularly valuable claims are involved, it is not enough simply to establish that a corresponding file exists. What matters is whether key information has also been independently confirmed by someone other than the party that stands to benefit from the transaction.
Clear allocation of responsibilities is equally important. If legal advisers, technical experts, buyers and sellers each assume that someone else has checked a particular fact, a gap emerges precisely at that point. And the greater the time pressure or competition for an attractive investment, the more important it would actually be to do the opposite of what intuition suggests:
Slow down.
This is not a wind power problem
Nor does the case reveal anything uniquely problematic about renewable energy. The principle applies to any market in which assets are traded before they have been fully completed.
Real estate developments, infrastructure projects, raw-material ventures or young technology companies can likewise achieve substantial valuations because certain rights, contracts, permits or expectations already exist.
The larger the proportion of value that lies in the future, the more important it becomes to ask which assumptions have already been independently verified.
In the Holt case, the intended final product made the issue particularly tangible. Eventually, a wind farm was supposed to stand on a piece of land. In some of the projects that were sold, however, not even the foundations for such a development existed.
According to ARD research, Holt’s plans went considerably further still: another scheme is said to have targeted proceeds of more than €1 billion.
It never got that far. Legally, Holt’s system came to an end much earlier. The fraud established by the court ultimately amounted to around €10 million. In 2022, Holt was sentenced to seven years and six months in prison in the central wind farm case; the judgment became final in 2023. Together with further convictions, this later resulted in a total prison sentence of just under nine years.
Today, Holt is on the run again. One may wonder who will encounter him first this time: investigators – or his next business idea.
Should he reappear somewhere with another business model, a second look would certainly not be a bad investment.
SK
