Serious JIALAT! MAS SLEEPING? AMDK Payment Co WIRECARD Collapsed as Auditor CANNOT FIND EURO 2.1BILLION reported to be in 2 Asian Banks in Sinkieland!

[Pinkieslut]

Wirecard Suspends Executive After $2.1 Billion Goes Missing


Wirecard AG has temporarily suspended its outgoing chief operating officer after revealing that auditors couldn’t find about 1.9 billion euros ($2.1 billion) in cash, spooking investors and casting doubt on the company’s leadership and survival.

Jan Marsalek has been suspended on a revocable basis until June 30, the company said in a statement on Thursday. James Freis, who had already been tapped to lead the company’s new “integrity, legal and compliance” department starting next month, will begin in his role immediately. Marsalek was due to step down from the COO role to a new position in charge of business development, Wirecard said in May.


The company suffered one of the worst stock slumps in the history of Germany’s benchmark index on Thursday after revealing that auditors had been unable to find billions of cash that was supposed to be held in Asian banks. The company warned loans of as much as 2 billion euros could be terminated if its audited annual report, delayed for the fourth time, was not published by June 19.

Marsalek had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but wasn’t successful, according to a person familiar with the matter. It’s unclear if the funds can be recovered, the person added.

A representative for Wirecard didn’t respond to requests for comment. Marsalek couldn’t immediately be reached for comment.

Ernst & Young was unable to confirm the location of the cash in certain trust accounts, and there was evidence that “spurious balance confirmations” had been provided, Wirecard said in a statement on Thursday. That’s about a quarter of the consolidated balance sheet total, Wirecard said.

“We are stunned,” said Ingo Speich, a fund manager at Deka Investments, a top 10 shareholder at the firm. “A new start in terms of personnel is more urgent than ever.”

The escalating crisis also calls into doubt the future of Chief Executive Officer Markus Braun, who is the company’s biggest shareholder. Braun has been at the helm since 2002, building the company from a startup into a payment provider whose technology facilitates transactions around the world.

Braun painted the company as a potential victim in a separate statement. The CEO has been resisting calls to resign and aggressively defending the company against accusations of accounting fraud, led by a series of articles in the Financial Times.

“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred,” said Braun, adding that the company will file a complaint against unnamed persons.

The stock dropped as much as 67% to 35.85 euros in Frankfurt on Thursday, the biggest fall on record and the largest for a member of Germany’s prestigious 30-company DAX stock index. Wirecard’s bonds also suffered a record plunge.

Loan Issue

Wirecard warned loans up to 2 billion euros could be terminated if its audited annual report was not published by June 19. Analysts at Morgan Stanley estimated that Wirecard has available cash of around 220 million euros, if it cannot locate the missing $2.1 billion.

“While we would expect Wirecard to seek covenant waivers, if the banks call 2 billion-euros of debt and that is mostly drawn, then we expect investor focus to turn to the balance sheet and liquidity,” said analysts at Morgan Stanley in a note on Thursday.

Wolfgang Donie, analyst at NordLB, warned that the “overall situation at Wirecard can only be described as insupportable and the scandal is now becoming a crisis that is threatening the existence of the company.”

German financial markets regulator BaFin said it is examining Wirecard’s disclosure on Thursday as part of its investigation into whether the company violated rules against market manipulation, according to a spokeswoman.



In September 2018, Wirecard reached a market valuation of 24.6 billion euros, replacing Commerzbank AG in the DAX alongside titans such as Volkswagen AG, Siemens AG, and Deutsche Bank AG. Following Thursday’s collapse, the company is valued at around 6.7 billion euros.

“Wirecard’s retreat could be terminal,” said Neil Campling, an analyst at Mirabaud Securities.

Asian Banks

EY told Wirecard that their results will require additional audits after two unnamed Asian banks that have been managing the company’s escrow were unable to find accounts with about 1.9 billion euros in funds, Wirecard said in an additional statement. Those funds had been set aside for risk management, the company said.

Wirecard said last month that the latest delay in publishing results was due to Ernst & Young needing more time to finish its review, and that the auditor hadn’t found anything material within the scope of its work. Wirecard had previously postponed the results while it was working with KPMG on a probe into allegations about accounting irregularities.

Braun has aggressively fought against allegations that the company’s financials have been mismanaged. Braun has also resisted calls from activist investors TCI Fund Management Ltd. to step down, promising to regain investor confidence and improve compliance and control.

Wirecard headquarters were searched in May by German prosecutors as part of a probe involving the company’s senior management.

Wirecard said in February that full-year revenue rose about 38% to 2.8 billion euros while earnings before interest, taxes, depreciation and amortization jumped 40% to 785 million euros.

 

[Pinkieslut]

From 2019


“Criminal liability may be attributable to a few local employees in Singapore according to local law,” said Wirecard. This is limited to specific transactions by certain Wirecard entities and had little bearing on the financial position of the whole group, it said. It did not name any particular firm or subsidiaries in its summary.

Rajah & Tann found that a director of Wirecard’s Singaporean entities had entered or gave instructions to enter an internal agreement and a separate internal transaction between the entities without authority to do so.

But these agreements and transactions were of a genuine nature, Wirecard said in a separate statement, without explaining how it arrived at this conclusion.



Wirecard said the law firm could not explain how several transactions occurred. These involved deals with other parties that Wirecard had no agreement or business transactions with.

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Wirecard fraud probe leaves unanswered questions

The internal probe also could not clearly explain why revenue from a Wirecard subsidiary’s relationship with third parties ended up being booked under a different Wirecard entity, said the payment firm’s summary.

In a separate statement, Wirecard said these transactions did not affect the profit and loss and balance sheet statements of the firm. It added that action has been taken to improve its internal compliance.

Wirecard also noted that Rajah and Tann’s review did not reveal any findings that point towards criminal liability at the Munich head office. It stated that “the independent review made no findings of round tripping or corruption”.




This statement appeared to put to bed allegations made by a whistle-blower of round tripping and forgery and sparked a 30 per cent rally of Wirecard shares in Germany on Tuesday.

The allegations were first reported by Britain’s Financial Times (FT) in a series of investigative articles last month.

Citing a paper trail of invoices and messages, the FT had said global executives had known or signed off on the fake transactions. It named Wirecard Asia director Edo Kurniawan as a central figure in the scheme. Wirecard has said it would sue the FT over the reports.

Analyst Robin Brass from German private bank Hauck & Aufhaeuser said: “This underpins our view that the whole negative stance from FT was exaggerated and once more created a strong buying opportunity for fundamental investors.”

However, The Straits Times understands that the Rajah & Tann probe was focused on Wirecard’s Singapore subsidiaries and not its global operations.

Wirecard turn downed a request by The Straits Times to see Rajah & Tann’s verbatim summary and interim report.

Its spokesman said: “The published summary from Rajah & Tann fully covers all material results. Wirecard will not comment beyond the shared Rajan & Tann report summary.”

A Rajah & Tann spokesman confirmed that it has submitted a summary of the findings it has uncovered so far, but also declined further comment on its review due to professional privilege with Wirecard.

Singapore police are investigating the allegations, following several raids of Wirecard premises in Singapore. German financial regulators are also investigating the company and have expanded their own probe into suspected market manipulation

 

[Pinkieslut]

The Wirecard documents, explained
The FT today published the latest piece in its investigation into Wirecard, which raised the prospect of a concerted effort to fake substantial sales and profits at the German fintech, a member of the Dax 30.

It also published some internal correspondence and documents that underpin that reporting, which Wirecard said were fabricated.

So, we thought it would be useful to explain what readers are looking at. We’ll attempt to walk you through the documents, with a digression or two to add context, and introduce some of the characters and concepts.

You can download the full set here, and you’ll want to have read the FT story first.

What do we have, and what are we looking for?
The FT has published six PDFs of emails or email exchanges between members of Wirecard’s finance team.

We’ve also published six spreadsheets that were sent as attachments with those emails, along with the archive of a corporate Skype chat, in which two employees discuss how one of the spreadsheets in particular was created for auditors at EY.

What we are looking for are indications of a concerted effort to inflate sales and profits at Wirecard businesses in Dubai and Ireland.

Business appears to have been attributed to clients that no longer existed in 2017, so a key question is whether payments processing for phantom customers was used to justify sales, profits and asset values reported by Wirecard.

Edo Kurniawan asks for paperwork
First up is an email exchange from December 2016, subject “Revenue Recognition”. Edo Kurniawan sent a Sunday night email to colleagues in Brazil, South Africa, Turkey, Romania and Ireland. (We’ve redacted most of the names.)

Regular readers will recognise Kurniawan as a key figure in FT stories this year. As head of international finance, reporting to Stephan von Erffa, deputy-CFO, he oversaw the accounts for Wirecard’s various businesses in Asia and the Pacific from Singapore. Kurniawan is now a suspect in a probe by Singapore police into potential accounting fraud and money laundering at several Wirecard subsidiaries in the region.

Back in December 2016, Kurniawan was concerned about documenting revenue recognition. Here’s his request:

Hermes, Moip and Provus are Wirecard units in India, Brazil and Romania, respectively. Kurniawan said the request was from an auditor, but also in relation to IFRS 15, an accounting standard on recognising revenue from contracts with customers.

Four days later a reply arrived from Alan White, finance director at Wirecard UK & Ireland. He didn’t have much to offer, but what he did write is important:

The key quotes are:

The data supplied to me for booking on [sic] the majority of the WUKI revenue us [sic] based on the attached files.

And:

I only get a report usually quarterly to book revenue without the back up data to support the calculations.

So let’s turn to the two spreadsheets which were attached to White’s email.

One is “WUKI Payplugger 2016 September”. As you’ll see, the spreadsheet is a little untidy, but appears to record a fairly small business with total revenues so far that year of €819,818 (cell L66).

Much more substantial business is contained in the spreadsheet that White said outlines “Al Alam revenues”. The file is called “Report WCUK-Ireland 07-09.2016”, and here’s the section which totals up revenues, cost of sales and the resulting profit (listed as “margin”) for a three-month period.

(We don’t know why it says “total Q2 2016”, when the months of July, August and September represent Wirecard’s third quarter financial period.)

So what is the source of the €51.6m in revenues? The sheet is titled a “reseller commission invoice”, and it details what appears to be payment processing business for 16 clients. There are monthly figures listed for each client, including net and gross transaction volumes, sales, costs and commission.

Commission, as listed in column AB, appears to be all profit, as it matches margin numbers in the summary table reproduced above.

So we have a relationship with Al Alam Solutions, producing the majority of revenues recognised at Wirecard UK & Ireland, and White not offering any other paperwork to support those figures. The extent of his knowledge about Wirecard’s arrangement with Al Alam or the customers listed is unclear.

Over to Munich
Our next spreadsheet helps flesh out the picture, and is one from which the FT published an extract in May. Here’s the email it comes from:

The FT revealed in May the very large contribution to Wirecard profits from three opaque partner companies, informed by this correspondence.

Kai Oliver Ziztmann was Wirecard’s head of corporate accounting and international reporting, and he refers to an excel file containing “numbers of the third party acquirers”.

‘Acquirer’ is payments jargon for a business that helps a merchant connect to the big payments networks such as Visa and Mastercard. It’s the link in the chain that collects money from card issuers and distributes it to merchants. Here’s a simple explanation from the UK Cards Association.

Wirecard is an acquirer in Europe, but has long said that it uses many partners around the world, for instance in countries where it lacks the appropriate licences itself.

So the set-up appears to be that Wirecard refers business to third-party acquirers, in return for commission on the payments processed. In fact this appears to be the German group’s largest business line: the FT has previously reported that at the start of 2018 “referring” was expected to contribute half of the €2bn in worldwide sales Wirecard forecast for that year.

We’ll come to Zitzmann’s second sentence, and why he sent the file to Kurniawan, in a moment. First turn to the spreadsheet itself “Übersicht Dritt-Acquirer 2017-06-30 Stand 20-07-2017 V1”.

Note, the following pop up will appear when it is opened:

The workbook will try to connect to an internal file system. Click “ignore links” to stop it.

There is a lot of relevant information in this workbook, so stay on the summary page first. Row 1 is the Wirecard entity, and below that in row 2 is the third-party acquirer with which it does business. Here they are, with the profit and loss figures for the fourth quarter and full year in 2016:

Translation:

Brottovolumen = gross volume
Netto Volumen = net volume
Umsatzerlöse = revenues
Materialaufwand = cost of materials
Ebitda-Effekt = Ebitda effect

And in graphical form, which makes clear the supposed size of Al Alam:

Now find cell E66 on the summary page. The figure for Wirecard UK & Ireland revenues in June to August 2016 exactly matches that in White’s spreadsheet - €51,647,090.20 - indicating a consistency in internal records over time.

Turn to the fifth tab, called “Report WCUK-Ireland 01-03.2017”, and there is another financial report for Al Alam’s business with Ireland, featuring the same customers as in White’s spreadsheet:

The previous tab, called “Q1 2017 Al Alam Card Systems”, has a similar report with financial data for a different set of customers channelled through CardSystems Middle East, Wirecard’s largest subsidiary in profit terms:

These are the 34 customers referred to in the recent FT news report. (Note there are 35 in total, but we did not include Orbitalpay, as the spreadsheets attribute zero business to it.)

When contacted by the FT, 15 of the 34 clients said they had never heard of Al Alam, and of those 15, only four said they did use Wirecard for payment processing at the time. Six of the 34 did not respond to requests for comment or declined to discuss the matter, and five other purported clients could not be traced or contacted.

It’s possible two of those clients were misidentified. Medline.com is the most prominent “Medline”, but there are more than 1,000 companies with “Medline” in their name in the Orbis corporate database.

“Enterpay” appears to be the Enterpay Corporation in Florida, which was registered in 2014 but failed to make further filings and was placed in administrative dissolution the following year. The Finnish fintech called Enterpay said it had not done business with Al Alam or Wirecard.

There are also seven companies with “Enterpayment” in their name in the Orbis company database. Of those, only a Polish air-conditioning company - which has not responded to requests for comment - appears to have been active since 2015.

Why did Zitzmann send the file to Kurniawan?
An underlying question is what these financial reports were used for. So look at the second sentence in Zitzmann’s email, where he draws Kurniawan’s attention to some of the balance sheet entries in the overview:

The receivables of 31st March 2017 you find line 39; line 40 are the trustee accounts - and we still have a deposit With PayEasy-WDT additional.

On the balance sheet of any company there will usually be a line for “trade receivables”. The figure represents sales that have been recognised in the accounts, but for which the money hasn’t arrived yet.

So the reference to receivables is important for two reasons. One is that it indicates that, as White wrote, that the figures in the internal reports reflect sales booked at the relevant Wirecard subsidiaries.

The second is that growing receivables balances can be an indication of accounting problems. If customers don’t eventually pay for services, or turn out to not really exist, then sales and profits will have to be restated.

Back in 2015 the FT identified what appeared to be a growing receivables balance at Wirecard, obscured by adjustments the company suggested analysts make to its cashflow statement. See the stories here, here and here. Wirecard said at the time that the analysis was based on a misunderstanding, did not reflect reality, and it stood by its published accounts.

Soon after Kurniawan received Zitzmann’s email, he sent a message to Stephan von-Erffa, Wirecard’s deputy CFO. Here it is in full:

The file called “receivables Q2 2017” was attached, which lists substantial debts owed to Wirecard businesses by a dozen companies (maybe keep this image open in a new tab, for reference):

Investors, and the German authorities, may want to understand what made these debts “special”.

A brief-ish refresher on the ‘special’ dozen
ConePay (Maxcone) and Centurion Online Payment International had owed Wirecard Singapore money for years, and are “transactional parties” under investigation by the authorities in Singapore as part of a criminal probe into Kurniawan and five of his Wirecard colleagues.

When the FT’s Stefania Palma paid a surprise visit to the Philippine address listed on the website of ConePay International, she found a confused fisherman, a Wirecard Bank statement, and no evidence of electronic payment processing:

The registered office of Centurion and PayEasy Solutions is a Manilla office that doubles up as the headquarters of Froehlich Tours, a bus and coach rental business owned by Christopher Bauer, a former executive at Wirecard Asia Pacific. (Mr Bauer was also involved with Ashazi Services, a Bahrain company featured early on in the House of Wirecard Series.)

An intriguing response to the FT story about Wirecard’s partners in the Philippines came from Escalion, one of the companies described in the article as a customer of PayEasy.

Escalion is a Luxembourg payments business in the Docler group of companies behind Live Jasmin, a popular webcam site for adults. Safe-for-work illustrative screengrab here:

After publication, Jasmin’s head of marketing got in touch with the FT to say it had no dealings with PayEasy whatsoever:

We are linked directly to Wirecard because they are one of our acquirer banks. There is no other party involved in this and we do not have nor need any other party to process transactions.

Moving on to the rest of the “special” dozen, note that the amounts owed by Goomo, Skilworth and Pakfin were identical as of March 31 and June 30, 2017, suggesting no activity with these customers in the three months between the two dates.

Allied Wallet was a US/ UK payment facilitator, which recently settled US charges that it helped perpetrators to defraud more than $110m from consumers in coaching scams, pyramid schemes and unlawful debt collection operations. The company and its officers settled without admitting or denying the allegations, and Wirecard has said it took appropriate measures when suspicious transaction patterns were noticed.

Allied Wallet’s UK business was placed into liquidation in August, after the Financial Conduct Authority withdrew its authorisation to provide payment services in June.

CAL is the name of the Israel Credit Card Company, controlled by Israel Discount Bank, which in November 2016 settled criminal charges related to allegedly fraudulent processing of payments for porn and gambling sites between 2006 and 2009. We previously wrote about the case when Dietmar Knöchelmann admitted helping ICC-Cal and its then-senior executives commit fraud as part of a plea agreement in Israel.

Strangely, given he was a director of Wirecard UK & Ireland between 2005 and 2009, the offence related to Knöchelmann’s activity at a different, unnamed, payment processor. It’s as if an executive at Deutsche Bank was caught committing a crime while somehow representing another bank.

The €6.6m debt owed by Wirecard Gibraltar to Senjo is curious because Zitzmann’s overview showed no movement in the figure throughout 2016. Wirecard Gibraltar, meanwhile, was placed into liquidation in 2013 but remains listed as a subsidiary of the group, and appears to have had about €50m of retained earnings sitting on its balance sheet for almost a decade.

Where were the auditors?
Take a breath to consider what we have so far. A very large proportion of Wirecard sales and profits appear to have been attributed to a relationship with Al Alam, a payment processor with a small office in Dubai and a minimal web presence. Visa and Mastercard both said they did not license Al Alam.

The documents indicate these profits from Al Alam were routed through subsidiaries in Dubai and Ireland that do not file public financial statements. So investors in a €17bn Dax-30 company have relied on auditors at EY to make sure everything was above board.

“No fuc**ing impairment test is necessary”
Jump to the final set of correspondence, starting with an email to Kurniawan on 6, April, 2018.

The brief message, with two attachments, was sent by Lars Rastede, a member of Wirecard’s German finance team whose title was: manager, mergers and acquisitions.

Rastede explained the use and purpose of the data in a subsequent Skype chat with Kurniawan. The two started by discussing a couple of the companies mentioned above - Centurion and Maxcone (also known as ConePay).

To understand this conversation requires some context. Throughout its history Wirecard has purchased portfolios of customer relationships. These were said to be groups of customers, to whom the group would then sell payments-related services.

Wirecard has tended not to disclose who sells it these portfolios, and its Asian expansion included such deals wrapped up with purchases of obscure payments groups. The very first story in FT Alphaville’s House of Wirecard series drew attention to some of these unusual M&A practices.

At last count the value of customer relationships on Wirecard’s balance sheet was €438m (page 28). Like any such asset, auditors must consider whether the value is fair, or if it should be impaired.

Rastede and Kurniawan’s discussion took place in the final days of EY’s audit of the Wirecard accounts for 2017, and during it Rastede explained the approach to the impairment testing of customer relationships in Munich.

It involved a simple test, he said. If gross profits from the asset were larger than an annual cost, known as depreciation, then the test was passed and “EY has to accept it”, Rastede said:

So long as profits claimed for the customer relationship were large enough, “no fuc**ing impairment test is necessary!”, he said.

Rastede also refers to the “Customer relationship monitoring file” he sent to Kurniawan, the one “with massive effort flowing into it”.

The file, called “Q4 2017 Monitoring CR_intern” is indeed massive, and the FT has redacted large portions of it which were not relevant to issues scrutinised in this investigation.

In it, the tab called “2017 Al Alam” displays a year’s worth of financial data for Al Alam’s relationship with CardSystems. Figures for the first three months of 2017 match those in Zitzmann’s overview spreadsheet.

So the internal financial reports are again consistent, and appear to have been used to justify sales, profits and asset values reported by Wirecard.

The FT’s confidence in the authenticity of these documents was informed by conversations with numerous whistleblowers in multiple countries.

That’s enough for now. We’d invite readers to carry out their own analysis of the documents, and share their conclusions in the comments.

Here are Wirecard’s responses in full:

On July 3, having been asked detailed questions about the nature of its relationship with Al Alam, and how the company could process payments without a relationship with Visa or Mastercard, Wirecard said the FT was relying on fake documents and provided the following statement, via its lawyers at Herbert Smith:

Consistent with Wirecard's strategy to hold own licences or BIN sponsorships globally, Wirecard‘s subsidiaries in Dubai have expanded their capabilities to include issuing and acquiring services in partnership with local BIN-sponsors, enabling Wirecard to offer more products and services regionally without the involvement of other partners in the region. In parallel, Dubai remains one of Wirecard's four major global processing hubs.

On July 18, in addition to accusing FT reporters of market manipulation, Wirecard said:

We reiterate that the information you claim to have is not authentic and we strongly urge you to reassess the quality and intent of your sources.
For confidentiality reasons, reports created for financial accounting purposes usually only present an aggregated view across clusters of clients, partners and processing partners. Detailed customer incorporation data is only maintained in customer relationship management and compliance systems and is rarely represented in internal financial reporting or is masked by aliases. Client and partner clusters can contain hundreds of individual merchants and their composition can vary over time, as for example payment facilitators activate or deactivate individual client relationships.
The Financial Times’ accusation that “monthly transaction volumes and the associated financial data for clients . . . were invented” is false. All customer relationships, including those not processed by financial institutions owned by Wirecard, are subject to regular audits in the annual financial statement audit. Such audits include random test purchases by the auditors at individual clients and the verification of subsequent transaction flows, verifying the integrity of the transaction value chain. We refer to the related key audit matters forming part of the auditors opinions from the respective audit periods.
We strongly reject any allegations of inaccuracy or falsification of reporting by Wirecard’s staff.

On October 10, 2019, the FT asked specifically about sales attributed to customers such as Cymix Prepaid, Molotok and Piku.

The FT also asked why four companies which said they did do business with Wirecard (1XBet, CCBill, Ventnor Enterprise and Allied Wallet), were identified in the files if, as Wirecard said, customer incorporation data is routinely masked by aliases.

Herbert Smith said:

It is wholly unclear what you intend to achieve by continuing to approach our client with such questions, in circumstances where our client has told you time and time again (since at least June 2019) that it does not believe the document to be authentic and where you have refused to provide any evidence to support your bare assertion to the contrary. What is clear is that your conduct, in so doing, continues to fall short of the standards of responsible journalism.

The company reiterated the above points October 14, adding that “customers usually contract and connect only to Wirecard, which acts as a platform to integrate the services of the various parties involved in the payment value chain.”

Al Alam said it does not comment on individual partner or client relationships. It also said:

We of course operate in full accordance with all applicable laws, rules and regulations, and we operate on sound commercial business practices.
Al Alam was not involved in any alleged process to fake revenues or profits at Wirecard.

EY declined to comment, citing client confidentiality.



Copyright The Financial Times Limited 2020. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

 

[nayr69sg]

isn't this from Oct 2019?

 

[mojito]

Old news.

 

[Pinkieslut]

Wirecard says it cannot rule out 'fraud of considerable proportions'
German payments company Wirecard AG said on Friday it cannot be ruled out that the company has become the "aggrieved party" in a case of "fraud of considerable proportions".
19 Jun 2020 08:15AM
Business
FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder
Bookmark
REUTERS: German payments company Wirecard AG said on Friday it cannot be ruled out that the company has become the "aggrieved party" in a case of "fraud of considerable proportions".

The video statement issued by Wirecard's management board follows the company's auditor refusing to sign off its 2019 accounts over a missing US$2.1 billion. Its shares dropped by around 60per cent on Thursday as the company said the delay could cause billions in loans to be called in as soon as Friday.

Auditor EY was unable to confirm the existence of 1.9 billion euros (US$2.1 billion) in cash balances on trust accounts, representing around a quarter of its balance sheet, Wirecard said on Thursday.

"At present it cannot be ruled out that Wirecard AG has become the aggrieved party in a case of fraud of considerable proportions," Wirecard Chief Executive Markus Braun said in the video statement released on Friday https://bit.Iy/3edfOuk.

(Reporting by Kanishka Singh in Bengaluru; Editing by Tom Hogue)

 

[laksaboy]

Kurniawan?

Looks like the Indon version of Jho Low. The money is gone.

 

[Pinkieslut]

Wirecard shares drop 60% after failure to post audit results
Berlin

WIRECARD'S auditor has refused to sign off its 2019 accounts over a missing US$2.1 billion, sending the German payments firm's shares down over 60 per cent on Thursday, as it warned the delay could cause billions in loans to be called in as early as Friday.

Wirecard said auditor EY had informed it that sufficient evidence could not be found for 1.9 billion euros (S$2.97 billion) in cash balances on trust accounts - or around a quarter of its balance sheet total.

Chief executive officer Markus Braun said Wirecard was urgently seeking to clarify the balances in question. "It is currently unclear whether fraudulent transactions to the detriment of Wirecard have occurred. Wirecard will file a complaint against unknown persons," he said in a statement.

Wirecard warned that a failure to provide certified annual and consolidated statements by Friday would allow approximately two billion euros in loans to be terminated.

Stay updated with
BT newsletters
In-house auditor EY had regularly approved Wirecard's accounts in recent years, and its refusal to sign off for 2019 provided dramatic confirmation of the failings highlighted in an external probe by KPMG last month.

The company has long been a target of short sellers who have questioned its financials. They responded by sending Wirecard's shares down by 60 per cent in Frankfurt trading, wiping eight billion euros off its market worth.

Bondholders also took fright: Wirecard's 2024 paper fell by 23 US cents on the day to trade at 58 US cents on the euro.

Wirecard had already delayed its annual report following last month's report by KPMG that addressed allegations of fraud and false accounting in a series of investigative reports by the Financial Times.

In the most serious finding in the report, covering the years 2016 to 2018, KPMG said it had been unable to verify the existence of one billion euros in revenue which Wirecard booked through its third-party acquiring partners.

Activist investors, led by British fund manager Chris Hohn, seized on the KPMG audit to demand the head of CEO Braun, who owns a 7 per cent stake in Wirecard. Mr Hohn followed up by filing a criminal complaint with the Munich prosecutor.

Prosecutors raided Wirecard's headquarters in a Munich suburb on June 5 and opened proceedings against management as part of the probe initiated by BaFin, Germany's financial regulatory authority. A spokesman said it would investigate the latest delay to results.

Wirecard has said it was cooperating with the investigation and the allegations against it were unfounded. REUTERS

 

[A Singaporean]

Same if audit is done on Temasek.