Philippines launches investigation into Wirecard’s billions of ghosts

MUNICH / MANILA (Reuters) – The Philippines is investigating Wirecard’s $ 2.1 billion accounting scandal, which said former chief operating officer of German payments firm Jan Marsalek could be in the country.

FILE PHOTO: Markus Braun, CEO of Wirecard AG, an independent provider of white label outsourcing solutions for electronic payment transactions, attends the company’s annual news conference in Aschheim near Munich, Germany on 25 April 2019. REUTERS / Michael Dalder / File Photo

Philippine Attorney General Menardo Guevarra said Wednesday that he had instructed state investigators to coordinate with the central bank’s anti-money laundering council in the Wirecard investigation.

Wirecard fired Marsalek on Monday after it revealed that the billions, allegedly held in two Philippine banks that have denied any connection to the German firm, probably did not exist.

“There is some indication that he may have recently returned and may still be here,” Guevarra said in a text message to reporters, adding that immigration records showed that the 40-year-old Austrian had been in the Philippines from 3-5. of March.

The Munich prosecutor’s office intends to seek Marsalek’s arrest, the German business newspaper Handelsblatt reported. Germany does not have an extradition treaty with the Philippines.

The Munich prosecutor’s office declined to comment, as did the court that would need to approve any arrest warrant. Marsalek’s lawyer could not be reached for comment.

Former CEO Markus Braun, who was arrested in Munich on Monday on suspicion of misrepresenting Wirecard accounts and market manipulation, was released on Tuesday after posting bail of € 5m ($ 5.64m) .

Although an arrest warrant has been issued against Braun, another Austrian is still under investigation. Braun’s lawyer, Alfred Dierlamm, declined to comment.


During Braun’s 18 years as CEO, Wirecard (WDIG.DE) became a $ 28 billion ‘fintech’ company that earned a spot in 2018 on Germany’s blue-chip DAX index. He fell out of favor last Thursday when the EY auditor refused to sign his 2019 accounts.

Braun said Wirecard may have been a victim of fraud before resigning last Friday. The resulting scandal rocked Germany’s financial establishment, showed that regulators had fallen asleep at the wheel, and cut Wirecard’s stock by more than 80%, to value the business at around $ 2 billion.

Bank of America Merrill Lynch lowered its share price target to € 1 from € 14 on Wednesday, saying customers may be starting to ditch Wirecard, while the banks to which it owes € 1.75 billion could be weighing the closing of credit lines.

“These developments can make the business unsustainable,” its analysts wrote in a note. “Clarity about the underlying business is unlikely to emerge for some time.”

Southeast Asian payments and transportation company Grab said it had put a partnership with Wirecard on hold.

The alliance, backed by Softbank (9984.T), was part of a broader pact with the Japanese investor who invested money in Wirecard last year.


New CEO James Freis, former financial investigator for the US Treasury. USA And head of compliance at the Frankfurt Stock Exchange, he maintains crisis talks with a consortium of 15 banks led by the Commerzbank of Germany (CBKG.DE)

Because Wirecard was unable to submit audited financial reports, banks could apply for the loans at any time.

Some creditors are not in favor of putting Wirecard into insolvency for now, but are demanding full transparency as they seek to get their money back, people close to the matter said.

With the revelation of the financial hole that eliminates a decade of cash flows, it will be difficult for Wirecard to survive even with a debt restructuring, as the underlying performance could be weak, said Richard Sbaschnig, a CFRA forensic accountant.

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Wirecard’s potential breakout value is likely to be limited, Sbaschnig added, as earnings appear to have been negative in 2018 after removing the impact of obscure third-party acquirer partners at the center of the alleged fraud.

German financial regulator Bafin, which filed a revised claim against Wirecard with prosecutors, parachuted to an official to stabilize its Wirecard Bank subsidiary.

Wirecard Bank owns € 1.4 billion, according to the latest figures, on behalf of depositors whose claims would be greater than those of bank lenders to the parent company.

Additional reports by Arno Schuetze, John O’Donnell, Anshuman Daga and Aradhana Aravindan; Written by Douglas Busvine; Michelle Martin and Alexander Smith edition

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