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June 18, 2020Blog Posts

Wirecard shares plunge after saying auditor can’t find billions of missing cash

MarketWatch

Shares in Wirecard lost nearly two-thirds of their value as the German payment processor said on Thursday its auditor can’t find evidence for a quarter of the cash on its balance sheet.

Wirecard WDI, -36.34% WCAGY, -31.93% shares close 63% lower as the firm said Ernst & Young said it didn’t have sufficient audit evidence for €1.9 billion euros in cash.

“There are indications that spurious balance confirmations had been provided from the side of the trustee,” the company said.

“Previously issued confirmations by the banks were no longer recognized by the auditor. All parties involved are endeavoring to clarify the matter as quickly as possible,” said Markus Braun, Wirecard chief executive, in a statement. “It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred.”

Wirecard said the banks managing the escrow accounts are two Asian banks that have investment grade ratings. The trustee, who has been in office since 2019, holds numerous mandates in Asia, Wirecard said.

The DAX DAX, +0.40% component postponed its 2019 annual financial statements for a fourth time, and if not completed by Friday, some €2 billion of loans can be terminated.

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File:Wirecard Logo.svg - Wikimedia Commons
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