Frankfurt (AFP)

The German online payments company Wirecard announced Thursday that it was filing for bankruptcy, the apotheosis of one of the biggest financial scandals of recent years, which tarnishes Germany's economic reputation.

Everything will have gone very quickly since the announcement on Monday by the company - listed on the star index of the Frankfurt Stock Exchange and which employs around 6,000 people - that a sum of 1.9 billion euros entered in its balance sheet, and supposed to come from banks in the Philippines, actually "most likely" did not exist.

After the resignation of the CEO, the collapse of the share price and the legal proceedings started, looming now the threat of liquidation.

The comparison with the gigantic Enron scandal in the early 2000s is becoming more and more necessary. The American energy group had sunk after having made up its accounts.

- Insolvency -

Wirecard announced Thursday to file for bankruptcy before the Munich Commercial Court, there it has its headquarters, because of "the threat of insolvency and over-indebtedness" affecting its parent company.

Clearly, the creditor banks that kept it on a financial infusion have obviously decided to turn off the tap.

They have the right to cancel loans of more than two billion euros, as soon as Wirecard is unable to present a certified balance sheet for the last year.

This certification was refused by the auditors after the discovery of the accounting hole of 1.9 billion. Obviously fictitious funds, representing a fraud of an unprecedented scale in the still new sector of online payments.

After this announcement, the title Wirecard fell at 10:40 GMT by 77% to only 2.82 euros, after having been suspended trading for one hour in the morning. The title still quoted 101 euros last Wednesday, just before the warning shot launched by listeners.

Wirecard is also studying whether subsidiaries, such as the one in Germany holding a banking license, or another in the United Kingdom issuing virtual payment cards, will also have to declare bankruptcy.

The German press reports on Thursday a movement of desertion of Wirecard customers, likely to worsen its already precarious financial situation.

Justice can now opt for the opening of a legal settlement, which may allow the company to restructure, or its liquidation if there is no hope of recovery.

Adding 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 is "a complete disaster", stormed at the beginning of the week the president of the gendarme German financier, BaFin, Felix Hufeld.

His organization was unable to prevent the scandal.

"Germany is the last place we could have imagined such a situation," was annoyed the Minister of the Economy, Peter Altmaier, while calling for "to take energetic measures" following this scandal.

- Wobbly model -

In this case, "the entire German financial system is covered with shame", judges the German press, indiscriminately questioning the supervisory bodies, the rating agencies, the auditors, banks and investment companies, which have burned billions of funds entrusted by private savers.

None of these players seems to have seriously looked into the Wirecard business model which guarantees payments for transactions made online by companies, such as airlines, travel agencies or online pharmacies, cashing in the process a risk premium.

A model that sparked rumors of fraud in 2015. Last year it was the Financial Times who raised suspicions of manipulation of Wirecard's balance sheets, with Asia as the epicenter of the drama. However, no consequences have been drawn.

The founder and former president of the company, Markus Braun, suspected of having "artificially inflated" the balance sheet, was charged this week and released on bail of 5 million euros.

© 2020 AFP