Business

Wirecard Defends Auditing Practices

Wirecard

Wirecard has denied claims levied by the Financial Times that its subsidiaries were not audited, according to a report by Reuters.

The FT, using a whistleblower as a source, said that Wirecard’s accounts in Card Systems Middle East in Dubai were not audited in 2016 and 2017.

“All subsidiaries of Wirecard, including Card Systems Middle East, are subject to regular audit procedures, including but not limited to quarterly and annual audits,” the company said in response to the claims.

Citing documents it said it received, the FT said the majority of Wirecard’s reported profits originated from three partner companies, and that most of those profits had been booked through Card Systems.

Wirecard responded to the FT story by saying that it had “many false and misleading statements.” Shares in the company closed 8.5 percent higher, which is in addition to the stock gaining around 15.5 percent recently.

In other Wirecard news, on Wednesday (April 24), Wirecard and Japan’s SoftBank Group announced a deal in which SoftBank will invest about EUR 900 million in Wirecard.

In a press release, the companies said the investment will come via a convertible bond mechanism. On Tuesday (April 23) Bloomberg reported a deal between the two was imminent. Wirecard said under the deal it will issue convertible bonds to SoftBank with terms of five years. It is convertible for about 5.6 percent of Wirecard stock at EUR 130 per Wirecard share.

Shareholders of Wirecard have to sign off on the deal at the company’s annual shareholder meeting on June 18. The two companies also inked a partnership for digital payment solutions in which SoftBank will support Wirecard’s geographic expansion in Japan and South Korea.

The two firms will also look for ways to collaborate in digital payments, data analytics artificial intelligence (AI) and other digital financial services. They are also expected to jointly explore new product and service offerings in digital lending.

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