WIRECARD THINKS ‘MISSING’ $2.1-B IN ITS BOOKS WAS A ‘FICTION’

Wirecard said on Monday that 1.9 billion euros ($2.1 billion) it had booked in its accounts likely never existed, a black hole that threatens to engulf the payments firm and tarnish the reputation of Germany’s financial watchdog, Patricia Uhlig, Karen Lema and John O’Donnell wrote for Reuters late on June 22, 2020.

The company is holding emergency talks with its banks, which are owed roughly 1.75 billion euros, to avert a looming cash crunch triggered by the missing money. Wirecard also said it is looking at the sale or closure of parts of its business, but its creditor banks are not interested in a fire sale, especially as litigation risks may put off buyers, one person close to talks told Reuters.

Felix Hufeld, head of Germany’s financial watchdog Bafin, described the crisis, which has seen around 11 billion euros wiped off Wirecard’s market value, as a “total disaster” and added “it is a scandal that something like this could happen.”

The company has been under scrutiny since a whistleblower alleged that it owed its success in part to a web of sham transactions. This culminated in a search for the missing cash, which last week hit a dead end in the Philippines, where the Bangko Sentral ng Pilipinas (BSP) said none of the money appeared to have entered the country and Bank of the Philippine Islands (BPI) and BDO Unibank said documents purporting to show Wirecard had deposited funds with them were false.