Payments firm Wirecard has said it believes it is likely
that €1.9 billion found to be missing from its accounts might not exist
following a preliminary investigation.
The situation came to light last year after a series of
reports in the Financial Times about alleged accounting irregularities in Wirecard’s
Asia operations. It has since been revealed that there is around €1.9 billion
missing from the company’s accounts in the Philippines, representing around a
quarter of its total balance sheet.
The German firm’s CEO Markus Braun resigned last week after
auditor EY declined to sign off its 2019 accounts over the missing money.
In a statement released today, Wirecard said: “The
management board of Wirecard assesses on the basis of further examination that
there is a prevailing likelihood that the bank trust account balances in the
amount of €1.9 million do not exist. The company previously assumed that these
trust accounts have been established for the benefit of the company in
connection with the so-called Third Party Acquiring business and has reported
them as an asset in its financial accounts. The foregoing also causes the
company to question the previous assumptions regarding the reliability of the
trustee relationships.
“The management board further assesses that previous
descriptions of the so-called Third Party Acquiring business by the company are
not correct. The company continues to examine whether, in which manner and to
what extent such business has actually been conducted for the benefit of the
company.”
Wirecard has now withdrawn its financial results for 2019 and
the first quarter of 2020. The company said it is in negotiations with banks
for financial aid and is considering cost-cutting measures, as well as restructuring.