Wirecard AG, a German financial services and payment processing company has recently been the subject of a significant scandal, which resulted in the company’s shares falling by as much as 71.4%.
According to a statement released by Wirecard on Thursday, the company’s chief operating officer Jan Marsalek was suspended on a revocable basis after 1.9 billion euros in cash was found missing by auditors. As a result, the company was subject to one of the worst stock slumps ever recorded on Germany’s benchmark index, after it was revealed that the money was missing from several Asian banks.
Wirecard’s audited annual report has thus far been delayed four times, most likely due to the now-revealed internal scandal. However, if the report is not published by June 19, then the company will have to terminate up to 2 billion euros worth of loans. Thus far, the auditing firm has been unable to locate the missing cash, but some evidence suggests that “spurious balance confirmations” have been found.
As a result of the scandal, the company’s chief executive officer’s integrity is also being called into question. Markus Braun, Wirecard’s CEO, is suggesting the company has been the victim of fraud, rather than internal accounting fraud.
Braun resigned from his role as CEO of Wirecard early this morning, following pressures for his resignation. The resignation is to take immediate effect, with James Freis taking on the role of Interim CEO.
Information for this briefing was found via Bloomberg and Yahoo Finance. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
