Wirecard has admitted that an amount of eur 1.9 billion recorded on its balance sheet, “there is very probably not,” feeding suspicion of large-scale fraud.
It could be the largest financial fraud recent, recalling the Enron scandal in the United States: the fintech German Wirecard has admitted on Monday that a sum of 1.9 billion euro, although recorded in its balance sheet, there was “very probably” not.
in addition to the business of the Dieselgate at Volkswagen or embezzlement of funds at Deutsche Bank, the fall of the provider of financial services in the segment booming of electronic payments – competitor to companies such as the French Worldline, the netherlands Adyen or the american Square – casts a shadow on the reputation and economic resilience of Germany.
In the night of Sunday to Monday, Wirecard, which is listed on the index feature of the Frankfurt stock Exchange, has admitted that an amount of eur 1.9 billion recorded on its balance sheet, “there is very probably not,” feeding suspicion of large-scale fraud.
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For this reason, the group auditors have refused to certify the accounts for the year 2019 of the company, in this case with multiple twists and turns that has already led to the resignation of the boss of the company and to the collapse of the price of the stock Wirecard. Monday morning, the stock is trading at only 16 euros, compared to nearly 100 euros on Wednesday, the eve of the revelation of doubts about the sincerity of the accounts, confirmed now.
Banks in the Philippines
This case has ramifications in the Philippines : it is where that $ 1.9 billion of the funds were supposed to be on account belonging to the service providers, namely banks. A sum that represents a quarter of the total balance sheet of Wirecard offers risk management services, credit card and transaction processing firms.
banks in The Philippines intended to house the funds claimed to have no connection with Wirecard and the country’s central bank, who opened an inquiry, has assured that “the missing funds are not entered in the financial system”. To make things worse, the lawyer is supposed to oversee the Philippines account management for Wirecard is not found.
Now, It “assumes” that the description of the activities carried out through these third parties accounts “is not accurate” and “continues to verify if these operations were actually carried out”. In the clear : the management is suspected of fund fictitious and a gigantic fraud.
The future of the company is now suspended from the loans of its banks, which could close the faucet. The company has in effect postponed indefinitely the publication of its results 2019. Worse, it “could not exclude a revision of the accounts of the previous years.”
The previous Enron
Presented for years as a “success story” of finance in German, today’s high of 6,000 employees and 26 branches throughout the world, Wirecard finds himself entangled in a spiral that recalls the fate of the group american energy Enron in the early 2000s. The group in texas, which swelled artificially their profits, hiding losses, and falsified its accounts to improve its stock market value, had ended by going bankrupt.
Wirecard is, at first, a startup company in German founded in 1999, having initially served as an intermediary in electronic payments made at the outset for the porn industry, and online games. Now, it is an avalanche of legal trouble on the horizon for her.
The former boss of the company Markus Braun and other members of the executive board are already covered in Germany by a criminal investigation on suspicion of price manipulation. They would have looked through several releases in march and April to spruce up an accounting to come from the accountancy firm KPMG. The prosecutor’s office in Munich, headquarters of Wirecard, has indicated that it could broaden the scope of its inquiry following the latest developments.
Finally, the asset managers DWS, within Deutsche Bank and that has resulted recently all of its positions on the title Wirecard, has already declared its intention to lodge a complaint against the company and its management.
