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posted by martyb on Tuesday June 23 2020, @03:38AM   Printer-friendly
from the what-a-wicked-web-we-weave... dept.

Wirecard says missing $2.1 billion likely did not exist; withdraws forecasts

Scandal-hit German payments firm Wirecard AG on Monday said a quarter of its assets totalling 1.9 billion euros ($2.13 billion) that auditor EY has been unable to account for likely did not exist in the first place.

The company, whose stock has plummeted 75% since EY refused to sign off its 2019 accounts last week, also said it has withdrawn its preliminary 2019 and first-quarter 2020 financial results as well as forecasts.

"The Management Board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist," the company said in a statement.

The development comes after Chief Executive Officer Markus Braun quit on Friday with the company scrambling to secure a financial lifeline from its banks, while its search for the money hit a dead end in the Philippines.

'Total disaster': Phantom billions plunge Wirecard into chaos

The one-time investor darling 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.

The episode marks a dramatic turn in the fortunes of a homegrown tech firm that attracted some of the world's biggest investors before a whistleblower alleged that it owed its success in part to a web of sham transactions.

See also: Wirecard shares crash again after payments firm says missing $2 billion likely doesn't exist
German finance minister on Wirecard oversight — 'the supervisory institutions did their job'
Bank of China Weighs Ending Wirecard's Credit Line
Short sellers made $2.6 bln off Wirecard plunge


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  • (Score: 2) by Fluffeh on Tuesday June 23 2020, @03:56AM (7 children)

    by Fluffeh (954) Subscriber Badge on Tuesday June 23 2020, @03:56AM (#1011426) Journal

    Given how long this cash has been on the books, it just shows how inept the long line of auditors has been, not to mention the financial and inventory management inside the company itself.

    I can't see this company surviving this in any way or shape unless it is bought and re-imaged under another name or through a tough transition to a new CEO and board with a long period of building confidence in investors again.

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  • (Score: 0) by Anonymous Coward on Tuesday June 23 2020, @05:37AM

    by Anonymous Coward on Tuesday June 23 2020, @05:37AM (#1011445)

    So are you arguing for Marxist economics and against communism/socialism?

  • (Score: 3, Insightful) by bradley13 on Tuesday June 23 2020, @06:11AM (4 children)

    by bradley13 (3053) on Tuesday June 23 2020, @06:11AM (#1011448) Homepage Journal

    it just shows how inept the long line of auditors has been

    Absolutely. Or...perhaps complicit?

    Anyway, "inventing" a couple billion Euros and hiding them through forged documents: Some people are looking at serious jail time here.

    Given that Germans tend to be thorough people, there's actually a decent chance that they will go all the way down, and find everyone who knew about this.

    --
    Everyone is somebody else's weirdo.
    • (Score: 2) by JoeMerchant on Tuesday June 23 2020, @12:13PM

      by JoeMerchant (3937) on Tuesday June 23 2020, @12:13PM (#1011523)

      Or...perhaps complicit?

      I'm leaning 51+% on the complicit side... either way, the auditors need to be held accountable for this as well. Being bad at your job as an auditor is effectively the same as being crooked - if they are complicit and good at what they do, they profited in ways that will never be traced back to them.

      --
      🌻🌻 [google.com]
    • (Score: 3, Touché) by JoeMerchant on Tuesday June 23 2020, @12:16PM (2 children)

      by JoeMerchant (3937) on Tuesday June 23 2020, @12:16PM (#1011525)

      they will go all the way down, and find everyone who knew about this.

      Oh, you mean like hanging the VW engineer out to dry for the emissions testing scandal?

      I agree that the lowest level people who were in the know and profiting, even if only through continued employment, should be held accountable - but finding lower level people who knew about illegal activities in no way absolves their management from responsibility of oversight.

      --
      🌻🌻 [google.com]
      • (Score: 1, Touché) by Anonymous Coward on Tuesday June 23 2020, @01:12PM (1 child)

        by Anonymous Coward on Tuesday June 23 2020, @01:12PM (#1011535)

        That's like when Wells Fargo got busted for creating millions of fake account for people, they fired a bunch of minimum wage positions and said "we've rooted out the problem and got rid of the people, nothing more to see here."

        • (Score: 2) by JoeMerchant on Wednesday June 24 2020, @02:26AM

          by JoeMerchant (3937) on Wednesday June 24 2020, @02:26AM (#1011817)

          I worked for a company that sold medical devices - they'd hire a new crop of 100 kids straight out of college every year, throw 'em out in the field with minimal training, and act surprised when laws were broken.

          --
          🌻🌻 [google.com]
  • (Score: 2) by driverless on Wednesday June 24 2020, @01:35AM

    by driverless (4770) on Wednesday June 24 2020, @01:35AM (#1011801)

    Wirecard says missing $2.1 billion likely did not exist

    That sounds almost like bitcoin.