Security & Fraud

Wirecard CEO Out After Auditors Reported $2B Is Missing

Wirecard

The founder and CEO of Wirecard AG resigned Friday (June 19) one day after auditors revealed 1.9 billion euros ($2.1 billion) were missing from the German payment processor’s accounts, The Wall Street Journal reported.

Markus Braun “resigned today with immediate effect,” the firm said in a statement. The company said the decision was made “in mutual consent with the supervisory board,” according to Reuters.

He will be replaced on an interim basis by U.S. manager James Freis, who was appointed as a member of Wirecard’s management board late Thursday, the report said.

Ernst & Young, the auditor, said it was suspicious of letters confirming the existence of the accounts and the amounts held in two Philippine banks, Wirecard said. The banks confirmed the letters were fakes.

“The document claiming the existence of a Wirecard account with BDO is a falsified document and carries forged signatures of bank officers,” a spokesperson for BDO Unibank Inc. told the paper, noting the matter was referred to the Philippine central bank.

In a statement, Bank of the Philippine Islands said, “Wirecard is not a client. Their external auditor presented to us a document that claimed that they are a client. We have determined that the document is spurious.”

Wirecard’s shares plummeted as the news prompted investors to abandon the once popular FinTech company.

The stock has plunged by nearly 80 percent over two days, the report said.

Wirecard did not respond to a request for comment from the Journal.

PYMNTS reported Thursday (June 18) that Wirecard postponed issuing its 2019 annual report after the company disclosed questions were raised about the existence of the cash in the trust accounts, about a quarter of the value on the company’s books.

In a statement, Wirecard said Ernst & Young told the firm that “no sufficient audit evidence could be obtained” to confirm that the money really exists.

“There are indications that spurious balance confirmations had been provided from the side of the trustee respectively of the trustee’s account holding banks to the auditor in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts for the benefit of Wirecard group companies,” the company said.

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