Wirecard CEO quits; search for missing $3b at dead end

FRANKFURT • The chief executive of German payments company Wirecard resigned on Friday after €1.9 billion (S$3 billion) went missing from its accounts, sending its shares into a tailspin and putting a question mark over the company’s future.

Mr Markus Braun, who built the German company into one of the hottest investments in Europe, leaves Wirecard facing a looming cash crunch amid allegations of fraud. The search for the missing money has since hit a dead end in the Philippines.

In a statement, the company said Mr James Freis, a former compliance officer at Germany’s stock exchange, had been appointed as interim CEO.

Wirecard is holding emergency talks with banks to secure a financial lifeline, three people with knowledge of the matter said, after its auditor, EY, refused to sign off on its accounts.

The company warned on Thursday that loans of roughly €2 billion could be terminated if its annual report was not published yesterday.

“It cannot be ruled out that Wirecard has become the aggrieved party in a case of fraud of considerable proportions,” Mr Braun said in a sombre video posted online before his resignation. He did not identify those he suspected of fraud.

The crisis deepened yesterday, with the two Asian banks that were supposed to be holding the missing cash denying any business relationship with the company.

BDO Unibank, the Philippines’ largest bank by assets, and the Bank of the Philippine Islands said in separate statements yesterday that Wirecard is not a client.

“It was a rogue employee who falsified documents and forged the signatures of our officers,” BDO Unibank CEO Nestor Tan said in a mobile phone message.

“Wirecard is not even a depositor – we have no relationship with them.”

The Bank of the Philippine Islands added that it is continuing to investigate the issue.

ROGUE EMPLOYEE

It was a rogue employee who falsified documents and forged the signatures of our officers. Wirecard is not even a depositor – we have no relationship with them.

MR NESTOR TAN, chief executive of BDO Unibank, one of two Asian banks supposed to be holding Wirecard’s missing cash.

The episode marks a dramatic turn in the fortunes of a homegrown tech firm that attracted some of the globe’s biggest investors when it was propelled into Germany’s DAX blue-chip index more than a year ago.

But its fortunes unravelled after a whistle-blower alleged that it owed its success in part to a web of sham transactions.

The company dismissed the claims but its failure to win a clean bill of health this week from its auditor for its accounts sent Wirecard shares plunging 24 per cent during early trading in Frankfurt yesterday, taking the stock’s losses to 71 per cent since Wednesday’s close.

BDO Unibank has reported the Wirecard issue to Bangko Sentral ng Pilipinas, the Philippines’ central bank, said Mr Tan.

Wirecard has also temporarily suspended its outgoing chief operating officer Jan Marsalek. He had tried to contact the two Asian banks and trustees over the past two days to recover the missing money but was not successful, a source said on Thursday.

EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for last year confirms failings found in an external probe by auditor KPMG in April.

REUTERS, BLOOMBERG

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