“The payment service provider Wirecard, embroiled in a balance sheet scandal, has filed for bankruptcy.” The Management Board of Wirecard AG has today decided to file an application for the opening of insolvency proceedings for wirecard AG at the competent district court in Munich due to the threat of insolvency and over-indebtedness,” the company announced on Thursday. In the evening, the Munich District Court confirmed the submission of the application. There is a 1.9 billion euro hole in the balance sheet of the payment provider.
It is being examined whether insolvency applications for Wirecard subsidiaries also need to be filed. Wirecard shares were suspended from trading for 60 minutes. It then plunged another 80 percent to €2.50. Since the rescheduling of the balance sheet for 2019 in the previous week and the admission of alleged air bookings amounting to billions of dollars, they have now lost almost 98 percent.
Previously, the securities had been traded at single-digit prices for the first time since the summer of 2011. At EUR 9.96, they reached their lowest level since August 2011.
Creditor banks had the right to cancel loans worth more than two billion euros if the company could not present a tested balance sheet for the past year by last Friday. But EY’s auditors had refused to testify when it emerged that trust account confirmations were apparently forged.
Wirecard’s €1.9 billion missing should have been accounted for in escrow accounts with two Philippine banks since the end of last year, but these accounts were presumed never to exist. Former CEO Markus Braun was temporarily remanded in custody on Monday and is now free again on conditionality and a bail of five million euros. The Public Prosecutor’s Office accuses the Austrian, who was born in 1969, of inaccurate representation of Wirecard balance sheets and market manipulation.
Board member Marsalek submerged
A major figure in the affair is believed to be in Southeast Asia. The Philippine Immigration Department is looking for former Wirecard executive Jan Marsalek. Marsalek was in the capital Manila on March 3 and left two days later, according to the Philippine Ministry of Justice. “However, there is some evidence that he has recently returned and may still be there,” Justice Minister Menardo Guevarra said. The Philippines also launched money laundering investigations.
Marsalek was regarded by the payment processor Wirecard as the right-hand man of the ousted CEO Braun. He was in charge of day-to-day business, but was suspended first last week, then dismissed without notice on Monday – a clear sign that Wirecard’s supervisory board and board now believe Marsalek has breached his obligations.