Security & Fraud

Philippines Opens Probe Into Wirecard’s Missing Cash

Wirecard Delays Annual Report After Auditors Can’t Confirm $2.1B In Cash Exists

The Philippines has launched an investigation into the missing $2.1 billion that Wirecard said it deposited in two of the island nation’s banks, Reuters reported.

Justice Secretary Menardo Guevarra said Wednesday (June 24) he told state investigators to coordinate with Bangko Sentral ng Pilipinas, the Philippines central bank, on the inquiry.

On Monday, the German payment processor company said Jan Marsalek, its chief operating officer, was fired after BDO Unibank Inc. and the Bank of the Philippine Islands said the deposits were never made.

The termination followed the resignation of the company’s CEO Markus Braun after auditors revealed the money was missing from escrow accounts at the two Asian banks.

Guevarra said Marsalek may be in the country, Reuters reported.

“There are some indications that he may have returned recently and may still be here,” Guevarra said in a text message to reporters, adding that immigration records showed the 40-year-old Austrian had been in the Philippines from March 3-5, according to Reuters.

Reuters reported Marsalek’s lawyer could not be reached for comment.

Munich prosecutors may seek Marsalek’s arrest, the German business daily newspaper Handelsblatt reported, according to Reuters. The two countries do not share an extradition treaty.

Reuters reported the prosecutor’s office and the court declined to comment.

Braun, 50, who was arrested Monday night (June 22) on charges of misrepresenting Wirecard’s accounts and market manipulation, posted bail of 5 million euros ($5.6 million) and was released Tuesday (June 23).

Braun’s lawyer, Alfred Dierlamm, declined to comment, Reuters reported.

SoftBank Group Corp. is facing questions about its investment in Wirecard. Last year, the Tokyo-based global conglomerate holding company paid 900 million euros ($1 billion) for a 6 percent stake in Wirecard. But even then, there were concerns about Wirecard’s accounting practices.

James Freis, Wirecard’s new CEO, who served as an investigator at the U.S. Treasury Department and compliance chief at the Frankfurt Stock Exchange, is in talks with 15 banks led by Germany’s Commerzbank, Reuters reported.

Wirecard’s stock continues to tumble. At the close on Tuesday, it had fallen to $12.30, down 28 percent from the previous close of $17.30. Last fall, the stock was as high as $157.65 per share.

Bank of America Merrill Lynch cut its share-price target to 1 euro ($1.23) from 14 euros ($15.75), noting customers may abandon Wirecard.

“These developments may make the business unsustainable,” an analyst wrote in a note, according to Reuters.

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