Categories: Security & Fraud

Singapore Banking Regulator Shuts Wirecard

Singapore’s financial regulatory authority announced Wednesday (Sept. 30) it has directed Wirecard AG to end its payment services in the Southeast Asian country and return customers’ funds by Oct. 14.

The Monetary Authority of Singapore (MAS), the nation’s central bank, said it has been monitoring the impact of Wirecard’s insolvency and the ability of the German payments firm to provide services.

The MAS has required Wirecard to keep customers’ funds in Singapore banks and help customers find alternative banks.

“Wirecard SG has informed MAS that it is unable to continue providing payment processing services to a significant number of merchants,” the regulator said on its website. “MAS has assessed that it is in the interest of the public for Wirecard SG to cease its payments services and promptly return all customers’ funds.”

Once valued at $28 billion, Wirecard filed for insolvency in June after admitting €1.9 billion ($2.1 billion) said to have been deposited in two Philippines banks did not exist.

Under the MAS order, Wirecard payments services in Singapore, credit card payments at merchants using its services and use of prepaid cards issued by Wirecard SG will be impacted.

“Customers who have not yet made alternative arrangements are encouraged to do so promptly,” the statement said. “Merchants may refer to the Annex for more details on alternative payment processing service providers.”

On Tuesday (Sept. 29), the Financial Times (FT) reported an EY whistleblower has alleged the global accounting firm was warned as far back as 2016 that senior managers at Wirecard may have committed fraud and one had tried to bribe an auditor. The audit by KPMG, a global auditing firm, said it was unable to obtain the data it needed for the audit and criticized the company for an unwillingness by its third-party partners to contribute to the report.

Last month, a Singapore businessman was charged with falsifying documents that showed more than 100 million euros ($118 million) in three accounts held on behalf of Wirecard AG, The Wall Street Journal reported.

Shanmugaratnam, 54, the owner of Citadelle Corporate Services, a corporate management services company at the heart of an investigation, is the first person outside of Wirecard to be linked to the suspected fraud at the disgraced company.

Investigators said three escrow accounts purportedly held €143.4 million ($169.5 million) at the close of 2015. One of them held €177.5 million ($209 million) at the end of 2016. But the three accounts didn't actually hold those funds, according to documents reviewed by WSJ.

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