Scale of Wirecard AG accounting scandal grows

Scale of Wirecard AG accounting scandal grows

Scale of Wirecard AG accounting scandal grows

The scale of the accounting scandal besetting Wirecard AG continues to grow. Wirecard”s running assumption is that 1.9 billion euros supposedly held in escrow accounts likely never existed. The company has experienced a dramatic drop in the value of its shares.

Wirecard AG has been the subject of criticism due to accounting irregularities for some time now. Seeking to dispel doubts, the payment services provider had planned on presenting its annual and consolidated financial statements on June 18, 2020 following multiple delays. Yet this too came to nothing. The reason: a lack of evidence corroborating bank account balances to the tune of 1.9 billion euros, an amount equivalent to around a quarter of the group”s total assets that was supposedly lying in escrow accounts at Asian banks.

According to an announcement made by the company on June 22, 2020, Wirecard now fears that the 1.9 billion euros in all probability does not exist. Until this point in time, the DAX-listed company had been operating on the assumption that the accounts did exist, presenting them as assets on its balance sheets. The banks in the Philippines had previously stated that Wirecard AG was not a client of theirs and that documents potentially showing balances on accounts at their banks must have been falsified.

The repercussions have been severe. Wirecard subsequently withdrew its estimated preliminary earnings for 2019 and the first quarter of 2020, it also not being possible to rule out an impact on previous years” financial statements. The former chief executive and another board member have since resigned from their posts. After failing to present the annual accounts on June 18, Wirecard announced charges against persons unknown, presenting itself as a possible victim of “gigantic fraud.”

The Munich Public Prosecutor”s Office is already investigating four board members on suspicion of market manipulation, two of whom are no longer in their posts.

Faced with one bad headline after another, Wirecard”s share price has fallen sharply. We at the commercial law firm MTR Rechtsanwälte note that shareholders have the option of asserting claims for damages. These claims may have arisen due to the company having failed to meet its reporting obligations and making false or incomplete disclosures. They may also stem from inaccurate information in the balance sheets, it potentially being possible to direct such claims against the company”s auditors.

Shareholders of Wirecard AG can turn to lawyers with experience in the fields of capitals markets and stock corporation law.

https://www.mtrlegal.com/en/legal-advice/capital-markets-law/stock-corporation-law.html

MTR lawyers www.mtrlegal.com/en/ is an international full service law firm. The lawyers counsel on corporate and commercial law, business law, tax law, IT law and IP law and distribution law. The law firm advises international companies, corporations, mid-sized businesses and private clients worldwide. MTR Rechtsanwaelte can be found in Berlin Bonn Cologne Duesseldorf Frankfurt Hamburg Munich Stuttgart, Germany

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