Wirecard chief quits as shares plummet over missing €1.9bn
Wirecard chief executive Markus Braun has resigned with immediate effect after the German payments firm’s disclosure of a €1.9bn (£1.7bn) accounting black hole sent shares into a tailspin.
Shares have plunged more than 80 per cent since Wednesday’s close after auditor EY yesterday refused to sign off Wirecard’s financial accounts after discovering that €1.9bn of cash was “missing”.
Wirecard shares deepened yesterday’s losses of 62 per cent, sliding a further 52 per cent this morning. Shares settled slightly on news of Braun’s departure, and were down 26 per cent to €29.6 at 3.50pm.
Wirecard said Braun’s departure happened “in mutual consent with the supervisory board”. His exit follows the suspension of Wirecard’s chief operating officer Jan Marsalek yesterday.
Braun, who was named Wirecard chief executive in 2002, has plugged tens of millions of euros of his own money into the firm, which has seen its valuation plunge from €24bn at its launch on Germany’s Dax 30 just two years ago, to little under €3bn today.
James Freis, who joined the company yesterday from Deutsche Boerse, has been appointed interim chief executive, Wirecard said in a statement today.
It comes after two of Germany’s biggest investors today said they were considering legal action against Wirecard over the missing cash. Asset managers Union Investment and DWS both issued statements saying they were investigating the accounting scandal and were prepared to sue.
Wirecard was plunged into crisis yesterday when its in-house auditor delayed the release of the fintech’s financial accounts after discovering that €1.9bn held in escrow accounts at two Filipino banks was missing.
BDO Unibank, the Philippines’ largest bank by assets, and the Bank of the Philippine Islands, today denied any relationship with Wirecard.
“Wirecard is not a client of the bank. The document claiming the existence of a Wirecard account with BDO is a falsified document and carries forged signatures of bank officers,” BDO Unibank chief executive Nestor Tan said in a statement. “Wirecard is not even a depositor — we have no relationship with them”.
The Bank of the Philippines said in a separate statement that it would investigate the issue and that Wirecard was not a client of the Manila-based bank.
The German fintech will face the possibility of having to repay €2bn in bank loans if its results are not signed off by the end of the day today.
Wirecard is holding emergency talks to secure a financial lifeline, according to people familiar with the matter;
In a video statement published last night, Braun said it was “unclear” why the banks “have stated to the auditor that the confirmations are spurious”.
He added that Wirecard may have become “the aggrieved party in a case of fraud of considerable proportions.”
But analysts
The German payments firm, which offers customers electronic payment transaction services and risk management, has been repeatedly accused of inflating its accounts, and has delayed its financial statements four times this year.
EY’s discovery yesterday of financial inaccuracies is the latest in a long string of accounting blunders for the company.
In April, auditing firm KPMG said it was unable to verify whether large parts of the fintech’s profits were real. Last October, Wirecard staff were reported to have fraudulently inflated profits at Wirecard’s Dubai and Dublin subsidiaries, the Financial Times reported.
The firm’s headquarters were searched in May by German police as part of a probe involving the company’s senior management.
Short sellers have repeatedly claimed Wirecard’s valuation is overhyped, and yesterday cashed in on the sharp sell off.