Wirecard bankrupt? Share pops up 150% | Financial

Bargain hunters seem to pick up the bumped share of the stock market on Monday. The share plummeted to € 1.67 even went above € 4 on Monday morning. That is still only a fraction of the € 190 that the Wirecard share was worth at its peak in August 2018. Exactly twelve days ago the price was at € 103.84.

The company filed for bankruptcy last week, but the proceedings are still pending at a court in Munich. The German competitor of the Dutch payment company Adyen declared this weekend to continue its business activities for the time being.

This has become possible because Wirecard Bank falls outside the parent company’s bankruptcy filing. German regulator BanFin has placed a special envoy with Wirecard Bank, after which the group’s payment processing activities were transferred to the banking division.

Investors apparently got excited after Wirecard Bank announced the news on Monday and stated that it did not expect any disruptions in Wirecard’s payment activities. The bank also reported that it was in ‘extremely close consultation’ with partners such as Visa and Mastercard.

In addition, there are rumors in the market about the purchase of parts of Wirecard by private equity. At the same time, a number of investors who went short and gambled with borrowed shares to fall in price had to take their losses and buy shares. That also gave the race some support.

€ 2 billion lost

The German group with payment processing, card issuing and risk management services for large customers is burdened with high debts that can no longer be repaid as liquidity dries up at the end of this month. The Financial Times reported early on that the group’s books were off. Wirecard certainly denied that, but later had to confess that almost € 2 billion probably never existed.

Wirecard, to which ABN Amro and ING, among others, provided loans, subsequently withdrew its financial publications for 2019.

When the stock collapsed and investors dropped out, the group filed for deferment last week. CEO Markus Braun was previously arrested on suspicion of fraud. He has now been released on bail.

The Wirecard affair has turned the German financial world on its head. The German government plans to overturn financial supervision of large listed companies because of the accounting scandal.

Intervention bookkeepers

The private organization that still controls the accounts of listed companies on behalf of the government may be put on hold on Monday, the Financial Times reports.

The supervision of auditors of listed companies is still the responsibility of the Deutsche Prüfstelle für Rechnungslegung (DPR), a private company with only fifteen employees. The German financial markets authority, BaFin, has instructed this institution to investigate alleged abuses in its current supervisory format. BaFin itself has no say in the process.

This construction would have avenged itself at Wirecard, where investigations by the DPR barely got underway following increasingly persistent rumors of accounting fraud.

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