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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The company, whose stock has plummeted 75% since EY refused to sign off its 2019 accounts last week, also said it has withdrawn its preliminary 2019 and first-quarter 2020 financial results as well as forecasts.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
(Score: 0, Disagree) by Anonymous Coward on Tuesday June 23 2020, @06:44AM (4 children)
This is what Germany gets from not having term limits in government. 15 years of Mommy Merkel in power, the main opposition party trying to have their fingers in at all costs rather than providing an alternative.
Things have just stagnated. Add to that the ludicrous covid-19 restrictions on the economy, and it's no wonder that these houses of cards kept on growing.
(Score: 5, Insightful) by Anonymous Coward on Tuesday June 23 2020, @06:52AM (1 child)
You mean that it's working out better for the US, where we do have term limits for the head of state, the opposition party provides an alternative instead of trying to get their fingers in at all cost, and covid19 restrictions have been carefully tuned to be effective yet not damage the economy?
How do you explain Lehman Brothers and Fannie Mae, which, besides being fraud scandals in their own right, managed to set off a global crisis on the scale of which Wirecards current troubles are not even a blip?
I dare to refuse your assertions and raise you a Ha-Ha!
(Score: 1, Funny) by Anonymous Coward on Tuesday June 23 2020, @03:23PM
How long can American scandals grow? After eight years, another party is in power that will take a close look at what the other party did.
(Score: 0) by Anonymous Coward on Tuesday June 23 2020, @09:15AM (1 child)
Lol, nice try. You're blaming this on Covid? That's rich, given that the Financial Times has been reporting on them [ft.com] since 2016 [ft.com].
But hey, don't let the truth hit you on the way out.
(Score: 0) by Anonymous Coward on Tuesday June 23 2020, @09:41PM
Fuck yeah, worldwide many of the regulators that were supposed to be watching out for the people's interest were disbanded to "work from home".