It could be the biggest recent financial fraud. The German company Wirecard admitted on Monday that a sum of 1.9 billion euros, although included in its balance sheet, "most probably" does not exist.
In addition to the business of Dieselgate at Volkswagen or embezzlement at Deutsche Bank, the fall of this financial service provider in the booming segment of electronic payments - competitor of companies like the French Worldline, the Dutch Adyen or the American Square - casts a shadow over Germany's reputation for seriousness and economic solidity.
This case is "a complete disaster", exclaimed Monday Felix Hufeld, president of the financial gendarme of the sector, the BaFin. He also acknowledged that his authority had "failed to prevent" a situation "never seen" in the flagship index of the Frankfurt Stock Exchange, the Dax, of which Wirecard is part.
The company's share collapses on the stock market
On the night of Sunday to Monday, the Bavarian firm admitted that a sum of 1.9 billion euros on its balance sheet "most likely does not exist", fueling suspicions of widespread fraud.
For this reason, the group's auditors refused to certify the company's 2019 accounts, in this affair with multiple twists and turns that has already led to the resignation of the boss of the company and the collapse of the Wirecard share price. .
On the Frankfurt Stock Exchange, the title yielded Monday 42% to 14.99 euros, against nearly 100 euros Wednesday, the day before the revelation of doubts about the sincerity of the accounts, now confirmed.
This case has ramifications in the Philippines: this is where the 1.9 billion funds were supposed to be in accounts belonging to providers, in this case banks. A sum which represents a quarter of Wirecard's balance sheet total, which guarantees payments for transactions made online by companies.
The lawyer who managed the accounts in the Philippines could not be found
Philippine banks believed to be hosting the funds said they had no connection to Wirecard and the country's central bank, which opened an investigation, said "the missing funds have not entered the financial system." To make matters worse, the lawyer supposed to oversee the Philippines' account management for Wirecard is nowhere to be found.
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Wirecard "assumes that the description of the activities carried out through these third-party accounts" is not accurate "and" continues to check whether these operations have actually been carried out ". Clearly: the management suspects fictitious funds and a gigantic fraud.
The rating agency Moody's said on Monday that it had removed Wirecard from its surveillance and the future of the latter remains suspended in support of banks, which could turn off the credit tap. The company has not only postponed sine die the publication of its 2019 results, but it "cannot exclude a revision of the accounts for previous years".
Long perceived as a “success story” of German finance, today with 6000 employees and 26 branches worldwide, Wirecard finds itself entangled in a spiral that recalls the fate of the American energy group Enron at the beginning of the years 2000. The Texan group, which artificially inflated its profits, masked its losses and falsified its accounts to improve its market value, had ended up going bankrupt.
An open criminal investigation
Wirecard is initially a German startup created in 1999, initially serving as an intermediary in electronic payments made for the porn industry and online games. Now it is an avalanche of legal problems looming for her.
Former boss of the company Markus Braun and other members of the executive board are notably targeted by a criminal investigation launched by the Munich public prosecutor's office for suspicions of price manipulation, following a complaint filed by BaFin.
They would have sought through several press releases in March and April to embellish a future accounting expertise of the firm KPMG. These leaders are now facing prison terms, says the Süddeutsche Zeitung.
