Security & Fraud

Wirecard: Internal Investigation Clears Accounting Manager

Wirecard: Investigation Clears Accounting Mgr

Wirecard, a German payments company, said an internal investigation has cleared its Asia-Pacific accounting manager who was accused of faking transactions to boost revenue numbers.

Reuters reported that in the wake of the news, Wirecard shares jumped 4 percent.

“From our point of view, he has been cleared by the internal investigation,” a company spokeswoman said in a statement to news organizations.

There was also another investigation by law firm Rajah & Tann, which is expected to be released soon.

The Financial Times released a series of articles alleging what’s called “round-tripping,” which is the act of faking transactions to make revenue seem higher than it is. The law firm’s initial findings in May spurred the FT reports.

Citing internal documents, FT reported that a senior executive at Wirecard was suspected last year of using forged and backdated contracts in a series of suspicious transactions, which raised concerns about the accounting integrity of the company.

The transactions were cleared by Edo Kurniawan, who is responsible for the payment group’s accounting in Asia-Pacific and is still employed with the company. The whistleblower reportedly spoke to FT because Wirecard never acted on the issue.

Shares in Wirecard fell as much as 25 percent after the article was published, and closed down 13.4 percent on Jan. 30, the stock’s largest intraday decline in nearly three years. The next day, the shares fell 0.3 percent. As a result, Wirecard CEO Markus Braun lost $221 million of his wealth.

In a statement published on the company’s website, Wirecard said the report was “inaccurate, misleading and defamatory,” adding that it “takes all compliance and regulatory obligations extremely seriously.” A spokeswoman also said the company welcomed the investigation.

Last month, Singapore police raided Wirecard’s location and also opened an investigation. The manager will reportedly remain on leave until external inquiries are completed.

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