Post by anenro on Jun 23, 2020 14:52:14 GMT 4
Wirecard says missing $2.1 billion never existed, rips up earlier accounts
Wirecard said on Monday that 1.9 billion euros ($2.1 billion) missing from its accounts was likely never there and it was looking at the sale or closure of parts of its business as it sought to avert a looming cash crunch.
The former German stock market darling, which processes payments for companies including Visa and Mastercard, has seen billions of euros wiped off its value in recent days and began trading in Frankfurt down 40%.
Wirecard is scrambling to shore up its finances and has appointed investment bank Houlihan Lokey as it seeks a deal with creditors, after seeing its credit rating slashed to ‘junk’ by rating agency Moody’s on Friday.
In a statement on Monday, Wirecard also withdrew financial statements for 2019 and said it was examining cost cuts to address the crisis which has engulfed what was once hailed as a relatively rare success story for the German technology sector.
“The Management Board of Wirecard assesses … that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist,” it said.
Wirecard said on Thursday that auditor EY had refused to sign off its 2019 accounts as it was unable to confirm the existence of 1.9 billion euros in cash balances in trust accounts, about a quarter of its balance sheet.
EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for 2019 confirmed failings found in an external investigation by KPMG in April, which in turn followed investigative reports by the Financial Times.
Wirecard’s latest announcement follows the exit on Friday of former chief executive Markus Braun, who was replaced by James Freis, an ex-compliance officer at Germany’s stock exchange.
The company has been under scrutiny since a whistleblower alleged that it owed its success in part to a web of sham transactions. This culminated in a search for the missing cash, which hit a dead end in the Philippines.
The Philippine central bank said none of the money appeared to have entered the country, after Bank of the Philippine Islands (BPI) and BDO Unibank said documents purporting to show Wirecard had deposited funds with them were false. Both said Wirecard was not a client.
Wirecard said on Monday that 1.9 billion euros ($2.1 billion) missing from its accounts was likely never there and it was looking at the sale or closure of parts of its business as it sought to avert a looming cash crunch.
The former German stock market darling, which processes payments for companies including Visa and Mastercard, has seen billions of euros wiped off its value in recent days and began trading in Frankfurt down 40%.
Wirecard is scrambling to shore up its finances and has appointed investment bank Houlihan Lokey as it seeks a deal with creditors, after seeing its credit rating slashed to ‘junk’ by rating agency Moody’s on Friday.
In a statement on Monday, Wirecard also withdrew financial statements for 2019 and said it was examining cost cuts to address the crisis which has engulfed what was once hailed as a relatively rare success story for the German technology sector.
“The Management Board of Wirecard assesses … that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist,” it said.
Wirecard said on Thursday that auditor EY had refused to sign off its 2019 accounts as it was unable to confirm the existence of 1.9 billion euros in cash balances in trust accounts, about a quarter of its balance sheet.
EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for 2019 confirmed failings found in an external investigation by KPMG in April, which in turn followed investigative reports by the Financial Times.
Wirecard’s latest announcement follows the exit on Friday of former chief executive Markus Braun, who was replaced by James Freis, an ex-compliance officer at Germany’s stock exchange.
The company has been under scrutiny since a whistleblower alleged that it owed its success in part to a web of sham transactions. This culminated in a search for the missing cash, which hit a dead end in the Philippines.
The Philippine central bank said none of the money appeared to have entered the country, after Bank of the Philippine Islands (BPI) and BDO Unibank said documents purporting to show Wirecard had deposited funds with them were false. Both said Wirecard was not a client.