Wirecard rejects latest FT allegations of suspect accounting

LONDON/BERLIN • German firm Wirecard has rejected fresh allegations of suspect accounting on Tuesday after the Financial Times (FT) published documents that it said appeared to indicate an effort to inflate sales and profits.

Shares in the payments group sank more than 20 per cent and its euro-denominated bonds expiring in 2024 fell 7.4 euro cents to €91.01 on the FT report.

Wirecard shares closed 12.8 per cent lower at €122.05 on the Frankfurt stock exchange.

"Today's article by the Financial Times is a compilation of a number of false and misleading allegations... which were already fully refuted before," Wirecard said in a statement.

The newspaper published documents, including internal company spreadsheets and related correspondence between senior members of Wirecard's finance team, which, in an accompanying article, it said appeared to indicate an effort to inflate sales and profits at Wirecard's businesses in Dubai and Ireland, as well as to potentially mislead EY, its tier-one auditor.

Wirecard said it was regrettable that FT chose to publish "such an irresponsible" article.

German markets regulator Bafin said it would include Tuesday's share price drop in a market manipulation investigation it started in April after earlier FT reports on the company sent the stock sliding.

The newspaper published documents... it said appeared to indicate an effort to inflate sales and profits at Wirecard's businesses in Dubai and Ireland, as well as to potentially mislead EY, its tier-one auditor.

"We are in very close coordination with Munich prosecutors," a Bafin spokesman told financial news website Borse Online.

The FT report comes after the paper published a series of stories earlier this year alleging fraud and false accounting at Wirecard's Singapore office and that a key Middle East unit was not properly audited.

The company has already denied FT's previous allegations, saying that although Dubai-based subsidiary Card Systems was not individually audited, its books had undergone higher-level "full-scope" scrutiny by auditor EY.

The Singapore police raided the premises of Wirecard at Mapletree Business City in February following the earlier fraud allegations by FT.

Founded in 1999, Wirecard initially provided financial services to online gambling and adult websites. After a decade of strong growth, the company last year unseated Germany's second-largest lender, Commerzbank, from its blue-chip status on the Dax index.

Wirecard, which based its Asian operations in Singapore, employs about 300 staff here out of its 5,000-strong global workforce, the company said in February.

The fintech giant provides cashless payment services to several big clients here, including payment of Electronic Road Pricing gantry tolls via credit card, mobile top-up services for EZ-Link, Singtel's mobile wallet Dash and payment processing for ComfortDelGro.

Other high-profile international clients include Samsung, Google and Apple.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 17, 2019, with the headline 'Wirecard rejects latest FT allegations of suspect accounting'. Print Edition | Subscribe