Wirecard told the world it was holding 1.9 billion euros in two banks in the Philippines. In June 2020 somebody finally asked the banks. Neither had ever done business with the company.
That is not the strangest part. A newspaper had been publishing this for five years, and Germany's response was to go after the newspaper.
This is episode two of THE MONEY THAT WASN'T THERE, a forensic-accounting series that ends every case by opening a real public document and showing the line that gave it away.
Wirecard was supposed to be the German technology company Germany had been waiting for. A payments firm from Aschheim, a Bavarian village of nine thousand people, that grew forty percent a year, entered the DAX in September 2018 by displacing Commerzbank, and peaked at roughly 24 billion euros in market value, more than Deutsche Bank.
Almost all of its reported profit came from three third-party partners nobody outside the company could verify: Al Alam in Dubai, PayEasy in the Philippines and Senjo in Singapore. The cash those partners collected never came to Germany. It sat in trust accounts, managed by a trustee in Asia, and that is where the 1.9 billion euros was said to be.
What this episode walks through, document by document:
Why a payment processor that also owned a bank produced accounts analysts openly called the hardest in the DAX to follow
The Zatarra report, the FT's House of Wirecard series, and the whistleblower documents describing round-tripping inside the Singapore office
February 2019: BaFin bans net short selling in a single company's shares, a first in German history, and files a criminal complaint for suspected market manipulation - against the Financial Times journalists and short sellers, not against Wirecard
The reported surveillance campaign against reporter Dan McCrum
April 2020: KPMG, hired by Wirecard itself to clear its name, publishes that it could not verify the majority of the third-party profits because it was not given the records. Analysts kept their buy ratings.
June 2020: EY finally contacts the banks directly. BDO Unibank and the Bank of the Philippine Islands state the confirmation documents are not genuine and that Wirecard is not a client.
18 June: Wirecard says the cash cannot be confirmed. 19 June: COO Jan Marsalek boards a private flight out of Austria and has not been seen in public since. 22 June: the company says the money likely does not exist. 23 June: Markus Braun is arrested. 25 June: Wirecard becomes the first DAX company ever to file for insolvency.
Where it stands, stated precisely: Markus Braun has been on trial in Munich since December 2022. He denies wrongdoing and his position is that he was deceived by others inside his own company. That case belongs to a court. Jan Marsalek is the subject of an Interpol red notice and has never stood trial; reporting by the Financial Times and Der Spiegel has placed him in Moscow. Germany's audit oversight body barred Ernst and Young from taking new listed-company audit clients in Germany for two years and fined the firm. BaFin president Felix Hufeld resigned in January 2021 and the regulator was restructured.
Enron hid its problem in a footnote too boring to read. Wirecard put its problem somewhere nobody could go and dared people to prove it. Nothing here required a whistleblower to be believed. It required somebody to telephone a bank in Manila.
SOURCES AND EDITORIAL NOTE: this video is built from public record - Wirecard's own ad-hoc disclosures and audited annual reports, the published KPMG special audit of 28 April 2020, BaFin's short-selling ban and criminal complaint, statements by BDO Unibank and the Bank of the Philippine Islands, the German parliamentary inquiry, and reporting by the Financial Times and Der Spiegel. Where a matter is before a court, it is described as an allegation and the defendant's own position is stated. Nothing here is a finding of guilt against any individual.
Episode 3: a company worth more than Ford Motor Company that has never sold a vehicle, whose entire prior-year revenue - four hundred and eighty-two thousand dollars - came from installing solar panels on its own founder's house.
#billionaire #money #wirecard
