Where's the money? Money tracker sheet

Dax company: Wirecard admits: there are probably no trust accounts

The financial services provider Wirecard assumes that the bank balances of 1.9 billion euros at the center of its accounting scandal do not exist. On the basis of further examinations, the board of directors assumes that the credit balances in Asian trust accounts so far reported by the company are "most likely not to exist," the company announced.

The company had previously assumed the existence of these accounts and reported them as assets. The management board now admitted that Wirecard "must question the assumptions about the reliability of the fiduciary relationships". According to the company, the sum in question corresponds to a quarter of the Group's total assets.

According to the announcement, Wirecard also assumes that the preliminary results for the past financial year and the first quarter of 2020 are also incorrect, and Wirecard withdrew them. As a result, possible effects on the annual financial statements of previous financial years cannot be ruled out. It will be examined whether, in what way and to what extent the so-called third-party business has actually been conducted in the interests of the company.

Founder resigned, shares on the ground

Last Thursday, Wirecard postponed the publication of the long-awaited 2019 annual financial statements for the fourth time. As a reason, the group stated that the auditor EY had not found sufficient evidence for the existence of the trust accounts. The most recent unsuccessful search for the money was in the Philippines. However, the Philippine banks BDO Unibank and Bank of the Philippine Islands announced that Wirecard did not have any accounts with them.

Documents from external auditors who had stated the opposite are therefore forged. Wirecard was unable to provide proof of the existence of the sum. According to the company, there are indications that a trustee has submitted false confirmations "for purposes of deception". In the wake of the scandal, the founder and CEO Markus Braun resigned, and the Wirecard share has meanwhile lost 70 percent of its value. The Munich public prosecutor's office is also investigating the executive board.

Since the EY auditors are unable to confirm the company's annual financial statements, banks can now reclaim loans granted to Wirecard. According to a company announcement, Wirecard is currently trying to "continue the credit lines and the further business relationship". Furthermore, the company is apparently planning cost-cutting measures such as "restructuring, divestment of parts of the company and product segments".