Wirecard Offices Searched in Probe Targeting Senior Management
Wirecard Offices Searched in Probe Targeting Board Members
(Bloomberg) -- Wirecard AG’s headquarters were searched Friday morning by German prosecutors as part of a probe involving the company’s senior management.
“The investigations are not targeting the company, but members of the management board,” Wirecard said in a statement. “The management board is confident that the issue will be resolved and the allegations prove unfounded.”
Wirecard shares fell as much as 12% during after-market trading on Tradegate compared to Friday’s close.
Munich prosecutors said in a statement that BaFin, Germany’s financial regulator, filed a “criminal complaint against those responsible at Wirecard for suspected market manipulation” regarding “misleading signals” given by Wirecard during March and April. The prosecutor has initiated proceedings against Wirecard’s entire board of directors, including Chief Executive Officer Markus Braun.
Wirecard last year launched a special audit from KPMG into its accounting and business practices, to be completed by the end of the first quarter 2020. On March 12, Wirecard in a filing said the publication will take until April 22, adding that it found nothing to indicate that its annual reports for 2016 to 2018 needed to be corrected.
The publication of the KPMG report was again delayed on April 22, when Wirecard reiterated that the current, preliminary KPMG findings didn’t suggest the firm needed to restate its annual reports, adding no substantial findings had been made in all four areas of the probe, including the third party partner business.
Wirecard’s shares surged following the statements.
However, KPMG concluded in late April that it was unable to obtain the data needed to confirm past revenues, and criticized the payment processor for internal “shortcomings” and unwillingness by its third-party partners to contribute to the report.
Wirecard is attempting to rebuild its reputation after facing repeated allegations about its accounting methods raised in a series of articles by the Financial Times. On Friday, Wirecard said the investigation was related to “ad hoc news preceding the publication of the KPMG report on the special audit,” Wirecard said in the statement.
Wirecard hired KMPG to look into its third-party partner business as well as its operations in India and Singapore following the reports by the Financial Times that accused the company of accounting fraud in several countries. Since then, the German fintech has drip-fed parts of the report to the market, including a statement last week that said KPMG had not made any substantial findings of questionable accounting methods in all four areas of the audit.
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