Once-mighty payments giant Wirecard reportedly faked client data and was lying about internal records in order to get a SoftBank investment for €900 million ($913 million), a report from Financial Times (FT) says.
The report said this investment was seen as a “vote of confidence” in the group, especially since FT was questioning its business in 2019.
The report notes that Wirecard’s reported deception is a big part of Munich prosecutors’ criminal case against former CEO Markus Braun, and they show how far the company has gone to get investment from SoftBank.
The report notes that the SoftBank investment was announced in April 2019 and then was followed by a sale of a €500 million ($507 million) bond to other investors.
The support from SoftBank did help Braun raise another €500 million in debt, but then Wirecard collapsed in June 2020 as it admitted half its revenues and €1.9 billion ($1.93 billion) in corporate cash didn’t actually exist.
The funds did help Wirecard’s operations, which were burning cash heavily, stay afloat, the report notes.
The FT reported at the time that there were three outsourcing partners, based in Manila, Singapore and Dubai, which made up half Wirecard’s revenue and almost all its operating profit. At that time, Braun said that report wasn’t true. Even so, SoftBank asked to see a list of the most important Wirecard clients processed through those partners.
Braun turned that down at first, saying it was confidential, but later compromised and said they could look at client data on a computer at Wirecard’s headquarters in Munich.
PYMNTS wrote that Stephan von Erffa, the former Wirecard head of accounting, reportedly admitted to forging documents in the ongoing case of the disgraced company.
See more: Wirecard’s Stephan von Erffa Reportedly Admits Forging Documents for Audit
The report said he was one of three defendants in a case from Munich prosecutors that deals with all of these crimes.
Von Erffa, the report says, was the first senior exec to admit wrongdoing since Oliver Bellenhaus, the head of a Dubai subsidiary, turned himself in in 2020.
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