'Total disaster' after Germany's Wirecard claims $2.1b was 'never there'

WION Web Team
New Delhi, India Published: Jun 22, 2020, 04:22 PM(IST)

This file photo taken on September 18, 2018 shows the company logo at the headquarters of the technology and financial services company Wirecard in Aschheim near Munich, southern Germany Photograph:( AFP )

Story highlights

Responding to this mishap, a German financial watchdog Bafin called the incident a 'total disaster'

German payment group Wirecard recently admitted that 1.9 billion Euros ($2.13 billion) earlier counted in foreign accounts is now unaccounted for, implying that “it was never there”. The auditor had refused to sign off 2019 accounts because of the missing amount.

After this, the group’s earlier financial statements were withdrawn.

Responding to this mishap, a German financial watchdog Bafin called the incident a “total disaster”.

"It is a scandal that something like this could happen", said Bafin president Felix Hufeld at a conference in Frankfurt.

The company Wirecard AG on Friday claimed to have a victim of "fraud of considerable proportions”.

On Thursday, the company shares had dropped by over 60 per cent. The company fears it will require loans to compensate for the mishap.

There was evidence of "spurious balance confirmations", said auditor EY, which was also unable to find the missing amount in trust accounts.

"At present it cannot be ruled out that Wirecard AG has become the aggrieved party in a case of fraud of considerable proportions," Wirecard Chief Executive Markus Braun said in a statement on Friday.

"It is currently unclear why the two banks have stated to the auditor that the confirmations are spurious. The trustee has announced to Wirecard AG that he will clarify the facts of the matter with the two banks managing the trust accounts at short notice," Braun said.

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