The director of Wirecard has resigned because two billion dollars are disappearing, they claim the fraud claims
“Without a brief brief explanation, we fear Wirecard is aimed at zero,” said Jasper Lawler, head of research at London Capital Group.
Founded in 1999, Wirecard was once considered one of the most promising technology companies in Europe. It processes payments for consumers and businesses and sells data analysis services. The company, which has nearly 6,000 employees in 26 countries, reported revenue of over two billion euros ($ 2.2 billion) in 2018, which is more than four times more than in 2013.
This week’s implosion follows a tumultuous 18 months for the company highlighted by fraud allegations, short seller seizures and accounting practice issues.
Billions are disappearing
The drop in grace accelerated on Thursday, when EY auditors announced they could not locate the 1.9 billion euros ($ 2.1 billion) in cash that was supposed to be in Wirecard accounts.
“We have data indicating that false or forged balance sheets were submitted in connection with these accounts,” the accounting firm said in a statement.
Brown suggested that Wirecard itself could be a victim of fraud.
“It cannot be ruled out that Wirecard has become a vulnerable party in the event of fraud of considerable proportions,” Brown said in a video statement released before his resignation.
In a resignation letter released by the company, Brown said he did not want to burden Wirecard.
“Capital market confidence in the company I run for 18 years has been deeply shaken,” Brown wrote in the letter. “By my decision, I respect the fact that the responsibility for all business transactions lies with the CEO.”
The company is now trying to find money to keep creditors afloat. According to Wirecard, a two billion-euro ($ 2.2 billion) loan to the company could be requested on Friday if auditors do not check out for its results.
Wirecard said in a statement that it was “in a constructive discussion with its banks on loans regarding the continuation of credit lines and further business relations.”
In Germany, the wirecard scandal raises questions about the Federal Financial Supervisory Authority or BaFin.
The regulator said Friday that it is actively investigating Wirecard.
“We are investigating Wirecard’s discovery from yesterday as part of our investigation into whether the company violated anti-market manipulation rules,” BaFina said in a statement.
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