Wirecard Plunges on Report Claiming Officials Knew of Book-Padding

(Bloomberg) -- Wirecard AG fell as much as 20 percent after a new report claimed that two senior executives knew of alleged accounting fraud, reviving concerns about its business practices.

Two officials in the Munich head office were aware of a “round-tripping” scheme in Singapore that may have been part of a pattern of book-padding across the company’s Asian operations, the Financial Times reported Thursday.

Wirecard denied the report in an emailed statement, saying that “nothing about the article published today is true.”

Shares were down 17 percent to 108.35 euros as of 3:40 p.m. local time. Wirecard was rocked last week by similar FT reports, and the stock has lost about 7.3 billion euros ($8.3 billion) in market value since the first story was published on Jan. 30.

The latest allegations add to concerns over Wirecard’s accounting practices, which the company has repeatedly sought to dismiss. Chief Executive Officer Markus Braun went on the offensive on Monday, telling investors and analysts he expects an investigation by an outside law firm to resolve allegations of compliance breaches and validate conclusions already made by an internal inquiry.

The company -- which supplanted Commerzbank AG in Germany’s benchmark DAX index last year -- is a leading player in the online payments industry. Founded in 1999, Wirecard initially provided financial services to online gambling and adult websites, barely surviving the dot-com bust. It’s now threatening traditional banks and until recently was worth more than Deutsche Bank AG, Germany’s largest lender.

It’s not the first time that the company has had to defend its reputation. The shares dropped after past claims were published about accounting irregularities in 2008 and fraud allegations in 2016. Authorities in Singapore are looking into the latest allegations, and Germany’s financial regulator is looking for signs of possible market manipulation.

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