ZCZC
BCN-23
GERMANY-MARKET-FRAUD-SINGAPORE
Report clears under-fire Wirecard of wrongdoing
BERLIN, March 27, 2019 (BSS/AFP) – Stocks in German payment processing
firm Wirecard leapt Tuesday following the publication of a legal report which
dismissed accusations of corruption and played down the financial impact of
suspicious transactions.
By 1530 GMT, shares in the Munich-based firm were up 24.85 percent to
123.60 euros, helping push the DAX up 0.63 percent, after the report found no
evidence of “criminal liability” in the firm’s German headquarters.
The surge reduced Wildcard’s stock price loss to seven percent since
January 1 following a disastrous start to the year fuelled by a series of
negative media reports.
In a statement Wirecard said the investigation conducted by Singaporean
law firm Rajah & Tann into charges of fraud in the fintech’s Asian subsidiary
had not found any “inaccuracies with material impact on the financial
reports”.
Several sums — 2.5 million euros ($2.8 million) in 2017 and three million
euros in 2018 — were “poorly recorded in the balance sheet”, but this was
corrected later, said Wirecard.
The investigation’s report also did not “find any case of corruption or
round-tripping” — a business strategy to sell assets to another business to
be bought back at a later date, which can boost balance sheets artificially.
The Rajah & Tann report released by Wirecard found no “criminal liability”
in the firm’s head office but said “some local employees” could be held
criminally responsible under Singapore law.
A local police investigation is ongoing in the city-state.
Wirecard, the rising star of Germany’s finance sector, was shaken by a
series of Financial Times articles earlier this year accusing the Bavarian
company of making false accounting entries in the Asian region.
As a result, nine billion euros was wiped off the company’s value on the
stock market, prompting BaFin, which supervises Germany’s financial markets,
to issue a temporary ban on negative speculation on Wirecard.
The firm was hailed as an early success story on the fintech scene when it
started in 1999, providing electronic payment services, a niche then ignored
by major German banks.
The company expanded with the boom of online commerce, ensuring the
settlement of transactions to help professional customers such as airlines
and online pharmacies.
BSS/AFP/HR/1012