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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The company, whose stock has plummeted 75% since EY refused to sign off its 2019 accounts last week, also said it has withdrawn its preliminary 2019 and first-quarter 2020 financial results as well as forecasts.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: 3, Touché) by JoeMerchant on Tuesday June 23 2020, @12:16PM (2 children)
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)
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
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]