Germany’s embattled Wirecard to continue business after insolvency

BERLIN (Reuters) – Wirecard, the German scandal payments company, said on Saturday that it will continue commercial activities after filing for bankruptcy and hopes that judicial authorities will soon appoint a provisional administrator.

“The board of directors believes that continuation is in the best interests of creditors,” it said in a statement. “The insolvency proceedings are still being reviewed.”

Wirecard collapsed Thursday due to nearly $ 4 billion creditors after revealing a hole in its books that its EY auditor said was the result of sophisticated global fraud.

The insolvency request did not include the company’s Wirecard Bank unit, which has deposits estimated at € 1.4 billion ($ 1.57 billion) and is already under emergency management by BaFin, the German banking regulator.

“Insolvency claims should also be continually reviewed for Wirecard Group subsidiaries,” the statement said. “With the exception of a small development branch, the Group companies have not currently filed for insolvency.”

The company said its bank would continue to make payments to merchants and that it was in contact with regulators and credit card companies.

The British Financial Conduct Authority (FCA) has imposed a number of requirements on Wirecard, including not having assets or funds, and not carrying out regulated activities.

The company said it was in talks with the FCA about its Wirecard Card Solutions Ltd unit and was hopeful that it will implement measures to allow it to resume operations.

The European Union is investigating BaFin about the Wirecard collapse, a rare move that creates shame in Germany days before it takes over the rotating EU presidency.

Investors want to know why EY did not detect Wirecard’s financial problems earlier.

(Report by Joseph Nasr; Mike Harrison Edition)