It could be the biggest recent financial fraud, recalling the Enron scandal in the United States: the German fintech Wirecard admitted on Monday that a sum of 1.9 billion euros, although entered in its balance sheet, "most likely" did 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.
On the night of Sunday to Monday, Wirecard, listed on the star index of the Frankfurt Stock Exchange, admitted that a sum of 1.9 billion euros on its balance sheet "most likely does not exist", nourishing suspicions of large-scale 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. .
Monday morning, the title traded at only 16 euros, against nearly 100 euros Wednesday, the day before the revelation of doubts on the sincerity of the accounts, now confirmed.
- Banks in the Philippines -
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 offers risk management services, credit cards and transaction processing, in particular to companies.
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.
As a result, Wirecard now "assumes" that the description of the activities carried out through these third-party accounts "is not exact" and "continues to check whether these operations have actually been carried out". Clearly: management suspects fictitious funds and a gigantic fraud.
The future of the company is now suspended from loans from its banks, which could turn off the tap.
The company has postponed sine die the publication of its 2019 results. Worse, it "cannot exclude a revision of the accounts for previous years".
- The previous Enron -
Presented for years as a "success story" of German finance, today with 6,000 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.
Wirecard is initially a German startup created in 1999, initially serving as an intermediary in electronic payments initially made for the porn and online games industry.
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 already under investigation in Germany for a criminal investigation of suspected price manipulation.
They would have sought through several press releases in March and April to embellish future accounting expertise from the firm KPMG.
The Munich prosecutor's office, Wirecard's headquarters, told AFP that it could widen the scope of its investigation following the latest developments.
Finally, the asset manager DWS, within Deutsche Bank and which has recently sold off all its positions on the Wirecard share, has already declared its intention to file a complaint against the company and its management.
© 2020 AFP