Wirecard: Some Singapore employees may be criminally liable

Wirecard had at first rejected a series of investigative reports by The Financial Times as "false, inaccurate, misleading and defamatory". PHOTO: AFP

SINGAPORE - Some employees of Wirecard's Singapore subsidiaries may be liable for criminal wrongdoing, said the German payments giant on Tuesday (March 26).

The appraisal came after the company made its own summary of an update from Singapore law firm Rajah & Tann, which Wirecard has engaged to look into allegations of internal compliance breaches.

The Straits Times understands that the Rajah & Tann review is not finalised yet.

"Criminal liability may be attributable to a few local employees in Singapore according to local law," said Wirecard. This is limited to specific transactions by certain Wirecard entities and had little bearing on the financial position of the whole group, it said. It did not name any particular firm or subsidiaries in its summary.

Rajah & Tann found that a director of Wirecard's Singaporean entities had entered or gave instructions to enter an internal agreement and a separate internal transaction between the entities without authority to do so.

But these agreements and transactions were of a genuine nature, Wirecard said in a separate statement, without explaining how it arrived at this conclusion.

Wirecard said the law firm could not explain how several transactions occurred. These involved deals with other parties that Wirecard had no agreement or business transactions with.

The internal probe also could not clearly explain why revenue from a Wirecard subsidiary's relationship with third parties ended up being booked under a different Wirecard entity, said the payment firm's summary.

In a separate statement, Wirecard said these transactions did not affect the profit and loss and balance sheet statements of the firm. It added that action has been taken to improve its internal compliance.

Wirecard also noted that Rajah and Tann's review did not reveal any findings that point towards criminal liability at the Munich head office. It stated that "the independent review made no findings of round tripping or corruption".

This statement appeared to put to bed allegations made by a whistle-blower of round tripping and forgery and sparked a 30 per cent rally of Wirecard shares in Germany on Tuesday.

The allegations were first reported by Britain's Financial Times (FT) in a series of investigative articles last month.

Citing a paper trail of invoices and messages, the FT had said global executives had known or signed off on the fake transactions. It named Wirecard Asia director Edo Kurniawan as a central figure in the scheme. Wirecard has said it would sue the FT over the reports.

Analyst Robin Brass from German private bank Hauck & Aufhaeuser said: "This underpins our view that the whole negative stance from FT was exaggerated and once more created a strong buying opportunity for fundamental investors."

However, The Straits Times understands that the Rajah & Tann probe was focused on Wirecard's Singapore subsidiaries and not its global operations.

Wirecard turn downed a request by The Straits Times to see Rajah & Tann's verbatim summary and interim report.

Its spokesman said: "The published summary from Rajah & Tann fully covers all material results. Wirecard will not comment beyond the shared Rajan & Tann report summary."

A Rajah & Tann spokesman confirmed that it has submitted a summary of the findings it has uncovered so far, but also declined further comment on its review due to professional privilege with Wirecard.

Singapore police are investigating the allegations, following several raids of Wirecard premises in Singapore. German financial regulators are also investigating the company and have expanded their own probe into suspected market manipulation.

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