What Happened at Wirecard? | Why did Wirecard go Bust? | Accounting Fraud WDI.DE Scandal

Wirecard’s board of directors admitted that the $ 2.1 billion that auditors could not find on its deposits probably never existed.

Promotions company fell at the beginning of last trading. For three sessions, the securities have lost more than 85%. The market value of the German payment provider today is $ 12.5 billion.

At the beginning of the week, the company withdrew preliminary results for 2019, the first quarter of 2020 and a profit forecast for 2020.. Wirecard warned that financial results of previous years may also be revised.

CEO Marcus Brown resigned on Friday after auditors found the funds, which account for roughly a quarter of the company’s total assets, could not be found. Before leaving, Brown suggested that the company may have been the victim of massive fraud..

He was later arrested on suspicion of falsifying the company’s earnings to make it more attractive to investors and clients, prosecutors said in a statement..

Brown surrendered on Monday night and will be attending future hearings where a judge will decide whether to keep him in custody.

The search for the missing amount was focused on the Philippines, but the country’s central bank said there were no records of the receipt of this money in its financial system.. The regulator has already started an investigation.

Wirecard is now struggling to find the missing piece that keeps the company’s creditors at bay. Payment operator has already hired investment bank Houlihan Lokey to develop a new financing strategy.

Wirecard is caught in a falsified reporting scandal

Founded in 1999, Wirecard was once considered one of the most promising technology firms in Europe.. It processes payments of individuals and legal entities, and also provides data analytics services. The company, which has nearly 6,000 employees in 26 countries around the world, reported more than $ 2.2 billion in revenues in 2018, more than four times its 2013 figures..

This did not pass the attention of investors. In September 2018, the company’s shares reached a value of $ 213. In the same month, Wirecard replaced Commerzbank at list of 30 best companies in Germany. At that time, its capitalization was more than $ 26.9 billion..

Its shares were trading at $ 14.56 yesterday, valuing the company at less than $ 2.2 billion..

The success story began to fade in January 2019 when Financial Times Says Wirecard Forged and Retroactively Sealed A Series of Suspicious Transactions in Singapore. The company denied this information, but its shares fell sharply.. In February 2019, Singaporean authorities said they would investigate.

Another blow was struck late last year when FT released a report and company documents suggesting that profits and sales were inflated at Wirecard’s Dubai and Ireland subsidiaries. Wirecard denied these allegations again. However, independent research showed that the payment operator did not provide enough information to completely remove their suspicions..

Wirecard is caught in a falsified reporting scandal

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