“At Wirecard, investigators have moved in again. Since the morning, five Wirecard properties have been searched, including the company’s headquarters in Aschheim near Munich and two buildings in Austria, the prosecutor’s office announced on Wednesday.
Twelve prosecutors, 33 police officers and other IT professionals were on site with Austrian colleagues. It is primarily the allegations that the basis of the investigation against former CEO Markus Braun is the basis, i.e. incorrect information and market manipulation in several cases. This was preceded by charges against Braun and his colleague Marsalek, who is believed to have gone into hiding in Asia. Both are Austrians.
It was also revealed on Wednesday that the Munich prosecutor’s office is now also investigating the former chief executive of the insolvent payment service provider on suspicion of fraud. In addition to balance sheet forgery and market manipulation, fraud is also considered, a spokeswoman for the agency said on Wednesday.
Wirecard insolvency administrator Michael Jaffé expects the payment processor to be sold in individual parts. “A large number of investors from all over the world have already come forward with an interest in acquiring the core business or the business areas that are independent and independently operating successfully on the market,” Jaffé said.
According to insiders, this includes financial investors, but also rivals such as the French Worldline. The creditors also gave the go-ahead for the mandate of specialised investment banks to deal with the sale of the individual parts of the company, the insolvency administrator said.
Us subsidiary Wirecard North America had already put itself up for sale on Tuesday. So far, apart from the parent company from Aschheim near Munich, hardly any subsidiaries have gone bankrupt. The proceeds of the sale would thus benefit the creditors of Wirecard AG.
The German Wirecard Bank has not yet been insolvent, and the financial supervisory authority BaFin has appointed a special representative there so that no money is paid to Wirecard AG. “Withdrawals to merchants and customers of Wirecard Bank are carried out without restrictions,” Jaffé stressed. If possible, wirecard operations should not be interrupted or discontinued.
Braun subsequently terminated without notice
After the share price slumped by around 99 percent to around one euro within a few days, Wirecard papers had recently recovered a little to 5.73 euros. The shares appear to have become a short-term speculative object, apparently driven by the vague hopes of some investors for a sale of the company.
Meanwhile, Wirecard’s Supervisory Board unexpectedly terminated the employment contract of former CEO Markus Braun. Although Braun had resigned almost two weeks ago, employment contracts of top managers usually also include provisions for severance payments and retirement provision.
However, both the Supervisory Board and the accounting firm EY, which audited Wirecard’s annual balance sheets, are facing lawsuits and threats from angry investors.
As things stand, Wirecard managers had invented a significant portion of the company’s sales and profits in Southeast Asia and the Middle East. The alleged sham transactions were recorded as transactions and profits with subcontractors allegedly making payments on behalf of Wirecard.
Wirecard had to admit that 1.9 billion euros are missing from its annual balance sheet.
Today, Wednesday, BaFin CEO Felix Hufeld will also have to face the members of the Bundestag’s Finance Committee. Critics accuse financial regulator BaFin of failing to control the payment service provider, and thus complicit yourselves in the multibillion-dollar accounting scandal.
His appearance behind closed doors of the Finance Committee will also determine whether Hufeld remains Germany’s top financial watchdog.
Meanwhile, the alliance has to discontinue its payment app “Pay&Protect”. The app was developed with Wirecard.
The Financial Times has since made new allegations in the scandal. Wirecard’s actual business was therefore based on far fewer customers than the company stated. In 2017, Wirecard generated more than half of its sales with only 100 customers.