Almost two decades of Markus Braun as executive director of Wirecard AG ended after the accusations about the accounting of the company culminated in a revelation that is shocking that you are unable to locate about $2,100 million in company funds.
James Freis was appointed interim executive director, told Clients in a brief statement Friday. Freis, recently hired and exejecutivo of compliance at Deutsche Boerse AG, had only been nominated as a member of the board of directors on Thursday.
The output of Braun occurs after a few days catastrophic for Wirecard, which suffered a collapse in the price of the shares after the two banks in asia who allegedly had the cash missing from denying any business relationship with the company.
Wirecard is now facing a possible cash crisis. The company warned Thursday that it could cancel loans for up to 2,000 million euros if its audited annual report is not published on Friday. Morgan Stanley analysts estimate that Wirecard has around 220 million euros of cash available if you are unable to locate the $2,100 million missing.
The lenders of Wirecard are considering hiring outside help to try to deal with the risk of non-compliance are massive, said a person familiar with the matter.
Appointed executive director in 2002, Braun has put tens of millions of euros of its own funds in the company. The value of their participation, that once you became a multi-millionaire, has decreased in the course of the crisis.
His replacement is taking in a situation almost unprecedented. It was assumed that Freis would not join until July, when he would be in charge of a department newly created by the integrity, legality and compliance.
Previously, Freis was head of compliance at Deutsche Boerse AG and held the position of director of the network of control of financial crimes of the Department of the Treasury of the united States, where he was responsible for the regulation of financial institutions.
Cash lost
Wirecard said on Thursday that the auditor Ernst & Young could not confirm the location of the cash shortage that was supposed to be kept in two banks in asia and reported that it had provided “confirmations false balances”.
The confusion deepened on Friday when BDO Unibank Inc., the largest bank in the Philippines in terms of assets, and Bank of the Philippine Islands said that Wirecard is not your client.
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“It was a dishonest employee who falsified documents and forged the signatures of our officers,” said the executive chairman of BDO Unibank, Nestor Tan, in a message through your mobile phone. “Wirecard is not even a depositor, and have no relationship with them”.
For its part, Bank of the Philippine Islands said in another statement that Wirecard is not his client and that he continues to research the problem.
The shares of Wirecard fell 52% in Frankfurt on Friday.
Wirecard had a market value of 24,600 million euros in September of 2018 when it came on the Dax index of Germany, and was widely regarded as one of the few success stories of fintech in Germany. The Friday morning was valued at around 2,400 million euros.
The spokespersons of Wirecard did not respond to calls or emails seeking comment.
Historic drop
The reversal in the fortune of Wirecard has been dramatic. Some of the shareholders more loyal to the company are now selling their participation due to accusations of accounting fraud involving the payment company from germany. Analysts also are rapidly changing their recommendations, despite ongoing concerns about the accounting of the company.
Until Wednesday, 10 of 25 analysts tracked by Bloomberg recommend buying the shares. Since then, at least nine analysts have removed their recommendations and three have lowered the rating of the shares to “sell.”
The regulator-the German financial market, BaFin, said it is also examining the disclosure of Wirecard Thursday as part of its investigation to determine if the company violated rules against market manipulation, according to a spokesman.
BaFin is carrying out three investigations on the performance of Wirecard: if the company manipulated the markets with his revelations, if the purchase of shares of Braun before the publication planned of the annual report of the company violated the roles of market abuse and if the company and its management are well suited to be owners of a bank.
Previously, Braun had stated that the company would be a possible victim, refusing to resign and defending aggressively to Clients against allegations of accounting fraud, led by a series of articles in the Financial Times.
Accusations of fraud
“Can not rule out that Wirecard has been a victim of a major fraud case,” said Braun in a press release published during the night.
The company temporarily suspended its director of operations, Jan Marsalek, said in a statement Thursday night. Marsalek, who was suspended on a revocable basis until June 30, he had tried to get in touch with the two banks and trustees, asian during the last two days to recover the lost money, but had no success, it said on Thursday, a person familiar with the matter. It is not clear if the funds can be recovered, added the person.
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