Wirecard Shares Jump 30 Pct Post-Investigation

Shares in Wirecard, which were down on allegations of misconduct involving its Singapore office, have rebounded on positive news from an investigation by an outside law firm, according to Reuters.

The firm found Wirecard may have indeed committed crimes, but that the crimes were not material to Wirecard’s financial position.

Shares climbed 30 percent on the news. They had been struggling ever since the Financial Times published articles earlier this year alleging false accounting and fraudulent practices from the firm’s Asia-Pacific office. FT’s reporting stemmed from a whistleblower’s allegations about  Singapore staff that was “round-tripping,” or padding revenues.

After the information came to light, Singapore police started investigating the firm and also raided the company’s building. German prosecutors responded by continuing to investigate for potential manipulation of the market. Market regulators in the country imposed a temporary ban on short sales of Wirecard stock in an attempt to stabilize the market.

Wirecard, which had been the top company in Germany’s thriving FinTech ecosphere, lost billions in value after the articles.

The company fired back in response to FT’s articles, saying the reporting was “false, inaccurate, misleading and defamatory.” However, Singapore law firm Rajah & Tann said it did find evidence that crimes might have been committed.

“The review … did not reveal findings of criminality in respect of the headquarters of Wirecard,” the company said. “Criminal liability may, however, be attributable to individual local employees in Singapore according to local law.”

As Wirecard pointed out, “The independent review had no findings of round-tripping or corruption.”

“This underpins our view that the whole negative stance from FT was exaggerated, and once more created a strong buying opportunity for fundamental investors,” said Hauck & Aufhaeuser Analyst Robin Brass.

Wirecard plans to delay the release of its 2018 annual report until April 25 in order to add the law firm’s account.