Wirecard Acknowledges Scale of Fraud Scandal
The once-prominent German payments firm admitted on Monday that the missing €1.9 billion on its balance sheets may "not exist”.
Following revelations last week that auditors for Munich-based payments company Wirecard refused to sign off on its accounts for 2019, with a total of €1.9 billion appearing to be missing from its finances, the firm has released statements acknowledging the scale of the issue as it continues to tank Wirecard’s value.
The company acknowledged that the €1.9 billion on its balance sheets most likely does “not exist”, and that it is currently holding talks with several banks about the possible extension of €2 billion in loans that, after the missed June 19 deadline for the release of Wirecard’s audited annual results, can now be called in at will.
Wirecard stated that it had previously mischaracterised its biggest source of profits, and is now determining “whether, in which manner and to what extent such business has actually been conducted for the benefit of the company.” It has also withdrawn its most recently released financial results on the premise that these may be inaccurate as well.
Felix Hufeld, head of German financial watchdog BaFin, called the crisis “a complete disaster” for Germany, adding that the country’s financial markets “should be governed by quality and reliability.”
At the time of joining the blue-chip DAX 30 two years ago, Wirecard was valued at €24 billion. Following last week’s news and a subsequent mass share sell-off, the firm’s value has now crashed to less than €3 billion.
Markus Braun, the company’s longtime CEO, resigned his position last Friday. Munich police have announced that a criminal investigation into Wirecard has been opened.