Germany's scandal-hit Wirecard says missing billions likely gone
Germany’s scandal-hit payments provider Wirecard said Monday there was a likelihood that the missing €1.9 billion euros from its accounts simply did not exist.
The company’s CEO Markus Braun resigned on Friday after auditors from Ernst & Young said a day previously that the billions were missing from Wirecard’s accounts.
The search for the missing billions hit a dead end on Sunday after two Philippine banks that were said to hold the money in escrow accounts said that they had no dealings with Wirecard.
“The Management Board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist,” a statement from Wirecast said on Monday.
Wirecard was once regarded as a darling of the growing financial technology sector and had stretched its presence to Asia and North America.
But the company became the subject of multiple Financial Times reports about accounting irregularities in its Asian operations. Wirecard disputes the reports, which date back to February 2019.
On Monday, shares dived as much as 44.9% in afternoon Frankfurt trading after news broke of the financial black hole.
Moody’s Investors Service on Monday withdrew Wirecard’s ratings, saying that “it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings.”
To keep the business afloat, Wirecard said it was continuing “constructive discussions” with banks on maintaining credit lines, and is “assessing options for a sustainable financing strategy for the company.”
The firm said it was also examining measures to restructure and dispose of business units.