{"id":15216,"date":"2020-06-25T19:09:00","date_gmt":"2020-06-25T16:09:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/wirecard-files-for-insolvency-owing-4-billion\/"},"modified":"2020-06-25T19:09:00","modified_gmt":"2020-06-25T16:09:00","slug":"wirecard-files-for-insolvency-owing-4-billion","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/wirecard-files-for-insolvency-owing-4-billion\/","title":{"rendered":"#Wirecard files for insolvency owing $4 billion"},"content":{"rendered":"

“#Wirecard files for insolvency owing $4 billion<\/strong>”
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\n Wirecard collapsed on Thursday owing creditors almost $4 billion after disclosing a gaping hole in its books that its auditor EY said was the result of a sophisticated global fraud.<\/p>\n

The payments company filed for insolvency at a Munich court saying that, with 1.3 billion euros ($1.5 billion) of loans due within a week, its survival as a going concern was \u201cnot assured\u201d.<\/p>\n

Wirecard\u2019s implosion came just seven days after EY, its auditor for more than a decade, refused to sign off on the 2019 accounts, forcing out Chief Executive Markus Braun and leading the company to admit that $2.1 billion of its cash probably didn\u2019t exist.<\/p>\n

\u201cThere are clear indications that this was an elaborate and sophisticated fraud involving multiple parties around the world,\u201d EY said in a statement.<\/p>\n

EY said while it was completing the 2019 audit, it was provided with false confirmations with regard to escrow accounts and reported them to the relevant authorities.<\/p>\n

Wirecard declined to comment following EY\u2019s statement.<\/p>\n

The financial technology<\/a> company is the first member of Germany\u2019s prestigious DAX stock index to go bust, barely two years after winning a spot among the country\u2019s top 30 listed companies with a market valuation of $28 billion.<\/p>\n

\u201cThe Wirecard case damages corporate Germany. It should be a wake-up call for reforms,\u201d said Volker Potthoff, chairman of corporate governance think-tank ArMID.<\/p>\n

Creditors have scant hope of getting back the 3.5 billion euros they are owed, sources familiar with the matter said. Of that total, Wirecard has borrowed 1.75 billion from 15 banks and issued 500 million in bonds.<\/p>\n

\u201cThe money\u2019s gone,\u201d said one banker. \u201cWe may recoup a few euros in a couple of years but will write off the loan now.\u201d<\/p>\n

The collapse of Wirecard, once one of the hottest fintech companies in Europe, dwarfs other German corporate failures. It has shaken the country\u2019s financial establishment, with Felix Hufeld, the head of regulator BaFin, calling the scandal a \u201ctotal disaster\u201d.<\/p>\n

Wirecard shares, which were suspended ahead of an earlier announcement that it would seek creditor protection, crashed 80 percent when trading resumed.<\/p>\n

They have lost 98 percent since auditor EY questioned its accounts last Thursday.<\/p>\n

EY, one of the world\u2019s \u201cBig Four\u201d accountancy and consulting firms, faces a wave of litigation in a debacle that has drawn comparisons with Arthur Andersen\u2019s disastrous oversight of US energy company Enron.<\/p>\n

German law firm Schirp & Partner said that with Wirecard now effectively sidelined, it would file class actions against EY on behalf of shareholders and bondholders.<\/p>\n

\u201cIt is frightening how long Wirecard AG was able to operate without being objected to by the auditors,\u201d partner Wolfgang Schirp said.<\/p>\n

Wirecard\u2019s new management had been in crisis talks with creditors but pulled out on Thursday morning \u201cdue to impending insolvency and over-indebtedness.\u201d<\/p>\n

The insolvency filing did not include its Wirecard Bank subsidiary, which holds an estimated 1.4 billion euros in deposits and is already under emergency management by BaFin.<\/p>\n

A second source close to talks with creditors said although the company had a healthy core, it had faked two-thirds of its sales. This meant there was no way it could repay all its debt, notwithstanding all the legal challenges it will face.<\/p>\n

The ascent of Wirecard, which was founded in 1999 and is based in a Munich suburb, was dogged by allegations from whistleblowers, reporters and speculators that its revenue and profits had been pumped up through fake transactions.<\/p>\n

Braun fended off the critics for years before finally calling in outside auditor KPMG late last year to run an independent investigation.<\/p>\n

KPMG, which published its findings in April, was unable to verify 1 billion euros in cash balances, questioned Wirecard\u2019s acquisition accounting and said it could not trace hundreds of millions in cash advances to merchants.<\/p>\n

\u201cToday is a complete vindication for those that exposed the fraud,\u201d said Fraser Perring, who bet on a fall in Wirecard\u2019s shares and co-authored a 2016 report that alleged fraud.<\/p>\n

The Munich prosecutor\u2019s office, which is investigating Braun on suspicion of misrepresenting Wirecard\u2019s accounts and of market manipulation, said: \u201cWe will now look at all possible criminal offences.\u201d<\/p>\n

Braun was arrested on Monday and released on bail of 5 million euros a day later. Former chief operating officer Jan Marsalek is also under suspicion and believed to be in the Philippines, according to justice officials there.\n <\/p><\/div>\n

Source<\/a><\/span><\/p>\n

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“#Wirecard files for insolvency owing $4 billion” Join the New York Post and Mansion Global for a live conversation on how COVID-19 has affected top real estate markets in the US, Friday, 6\/26 @ 12 p.m. EST. Register here. Bayer settles Roundup cancer lawsuits for up to $10.9 billion Wirecard collapsed on Thursday owing creditors…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[27613],"class_list":["post-15216","post","type-post","status-publish","format-standard","hentry","category-general","tag-wirecard-files-for-insolvency-owing-4-billion"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/15216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=15216"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/15216\/revisions"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=15216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=15216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=15216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}