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- Wirecard AG, a German giant in payment processing and crypto debit card issuer, has announced that €1.9 billion cash is missing from one of their accounts.
- Ernst & Young, failed to provide evidence of such gigantic amounts which led to a decline of shares by 50%.
- Markus Braun, chief executive of Wirecard, has resigned with immediate effect after he claimed that it was unclear whether fraudulent activities have taken place or not.
Wirecard AG, a German giant in payment processing and crypto debit card issuer, has announced that €1.9 billion cash is missing from one of their accounts. Their auditor, Ernst & Young, failed to provide evidence of such gigantic amounts which led to a decline of shares by 50%.
Markus Braun, chief executive of Wirecard, has resigned with immediate effect after he claimed that it was unclear whether fraudulent activities have taken place or not. The resignation was in mutual consent with the supervisory board appointing James H. Freis as interim director. Two Asian banks have been entrusted with managing the escrow account and they have an investment-grade rating.
Financial Statements of WireCard Not Released
The company has postponed its release of financial statements for 2019 a fourth time as a committee is set up to investigate the matter. Loans approximating €2 billion may be terminated if the statements are not released by 19th June 2020. In October last year, allegations were levied that Wirecard employees conspired to inflate the sales and profit of the company. Additionally, after an investigation, KPMG found out that revenue from its third-party acquiring business could not be proved.
It is now a matter of joke as people claim that there are more red flags in the company’s management than a communist rally. It is an existential crisis as told by Wolfgang Donie, an analyst at NordLB. Braun is under investigation from Germany’s stock market regulator for insider trading allegations to make matters even worse. At the same time, he was the largest shareholder with 7% held under his name.
Wirecard has said that its team is working closely with the auditor for clarification on the matter. The last 18 months have been tumultuous for the company due to accounting charges faced by employees capped with top-level mismanagement. Deka Investments, another of the firm’s largest shareholders, said that they are looking at the situation with disbelief. They have a plea for a fresh start from the top management itself. The company handles millions of credit and debit transactions each year as a prestigious member of Visa and Mastercard networks. It has hurt its brand value and will look to clear all allegations made against them.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
