€900 Million and the Cost of Assumptions

In February 2026, Belgian investigators conducted searches related to a complex real estate deal for EU-owned properties. The deal (€900 million) is now under criminal review, and prosecutors will have to determine whether all relevant procedures were followed during its execution (S).

The case has attracted attention not just for the abnormal scale of the deal, but also because of the profile of the institutions in question. This is not a small private operator, not a little-known intermediary, not a newly established company. The deal involved established public entities operating within structured regulatory and compliance frameworks.

And yet, the investigation was started. This is a reminder of the most significant rule regarding high-value transactions:

Institutional status does not eliminate transactional risks

The Illusion of Safety in Institutional Transactions

With complicated transactions, especially those involving public entities, multinational or regulated organisations, there is often an assumption of procedural reliability.

The reasoning usually goes something like this:

1. For a public entity, governance must be robust.
2. If it falls under EU or similar regulatory regimes, the oversight must be adequate.
3. If the counterparty has a long operational history, the risk must be minimal.

But experience always suggests that these assumptions can be misleading.

Thus, large institutions are not immune to:

1. Governance gaps;
2. Internal conflicts of interest;
3. Valuation distortions;
4. Decision-making irregularities;
5. Reduction of procedures;
6. External influence pressures.

In fact, the multiple layers of institutional structures can obscure accountability more than enhance it.

Reputation Is Not a Risk Assessment

One of the most frequent transactional errors is replacing reputation with verification.

Counterparties often rely on brand, recognition, public status, regulatory affiliation, political visibility or market position rather than engaging in an independent, organised assessment of: ownership and beneficial control, Governance architecture and decision pathways, internal approval mechanisms, reputational vulnerabilities, and stakeholder pressures.

Reputation can reduce perceived risk, but it does not eliminate real hidden danger.

The Hidden Complexity of Large Real Estate Transactions

Big real estate deals, especially those involving public or quasi-public assets, have their own structural risks:

1. Valuation Risk. Valuation methodologies can vary significantly based on assumptions: future cash flows, market comparables, development potential, regulatory constraints, and financing structures. Even minor changes in assumptions can have a significant impact on the valuation when large amounts are involved.
2. Procedural Risk. Public bodies are subject to procurement rules, transparency laws, conflict-of-interest restrictions, and layers of approval processes. Improperly noting down or not recording any step can cause a criminal or administrative review later on.‍
3. Governance and Oversight Risk. Responsibility can be dispersed among many committees and boards, advisory layers, and external consultants in complex institutions. Such fragmentation can obfuscate accountability, dampen internal challenge mechanisms, and allow for decision inertia or untested assumptions.

Why Independent Due Diligence Matters — Especially When the Counterparty Is «Safe»

Many institutions relax due diligence when dealing with established organisations. The logic is something like this:

«If it’s an EU-owned asset or a public entity, the system has already validated it.»

This way of thinking can lead to blind spots.

In large transactions, the scope of due diligence should reach well beyond basic checks and compliance confirmations. It should systematically analyse:

1. Ownership chains and ultimate beneficial control;
2. Governance practices and board composition;
3. Decision-making authority and approval procedures;
4. Financial stress indicators and exposure signals;
5. Regulatory history and enforcement interactions;
6. Influence networks;
7. Reputational risk vectors across jurisdictions.

This is not about distrust. It is about the risk management discipline.

The Real Cost of Assumptions

In high-stakes cases, assumptions can become extremely costly. Potential costs include: reversal of transaction, regulatory sanctions/fines, criminal investigation, lawsuits for breach of contract, reputational damage to the company, reduced stakeholder confidence, which in turn dampens overall performance, and internal governance actions.

In contrast, structured professional assurance is cheap relative to transaction size. In the case of a €900 million deal, even a 1% loss equals €9 million.

A Practical Framework for Decision-Makers

Here are several practical principles for boards, investment committees, and transaction managers:

1. Separate institutional status from risk analysis. Evaluate facts, not assumptions.
2. Map decision pathways before commitment. Know who has to sign off on what — and how.
3. Stress-test valuation methodologies. Question assumptions behind the numbers, not just final totals.
4. Analyse governance, not just financials. Improper governance is often the precursor to financial irregularities.
5. Assess reputational spillover risk. Investigation may have an impact on partners, investors, and counterparties.‍
6. Utilise third-party reviewers for key transactions. Confirmation bias is mitigated by an external perspective.

Institutional Does Not Mean Infallible

The Belgian investigation has yet to establish guilt. Instead, it establishes something more fundamental: regulatory frameworks do not eliminate risks. Complexity does not guarantee control. Scale does not guarantee accuracy. In large transactions, confidence has to be evidence-based — not reputation-based.

Final Reflection

The lesson behind this €900 million case is not a matter of a single jurisdiction or a single transaction. It is about discipline. Assumptions will be extremely expensive in large transactions. Professional verification is significantly cheaper. For organisations working with high-value assets, due diligence is more than just an ancillary operation; it is a necessary precaution.