Wirecard plunges as 1.9 billion EUR is missing from the books

Dangerous liaisons surfaced as Wirecard is under audit.

Not every company or business confronts the pandemic's effects. Some could be exceptional cases, such as the German payment processor and financial services provider, Wirecard. The company, which processes tens of billions of EUR worth of credit and debit transactions yearly, is facing some difficult days, as it is short 1.9 billion EUR, and started to rise brows on its accounting practices.

It all started last October when The Financial Times reported that the Wirecard staff seems to have conspired to illegally exaggerate the sales and profits of Dubai and Dublin subsidiaries. The allegations were denied after KPMG couldn't prove the revenue generated by its third-party acquiring business.

In December, the FT revealed that the escrow accounts managed on behalf of Wirecard have been used to pump up the cash balances.

Now, as the company is under audit, more information surfaced, as the auditor cannot find proof of the amount made in the last quarter of 2019.

Moreover, the CEO, Markus Braun, resigned. His departure comes after the two Asian banks that allegedly hold the missing money denied having worked with the company - the largest Philippine bank by assets, BDO Unibank Inc., and the Bank of Philippine Islands. According to BDO's CEO, Nestor Tan, "It was a rogue employee who falsified documents and forged the signatures of our officers.” Bank of Philippine Islands will investigate the issue.

If the results are not published today, the 1.9 billion EUR worth of loans could be terminated. On top of that, the company's bonds worth 500 million EUR, which had 2024 as a maturity date trade now at 24 cents. Nine hundred million EUR worth of convertible bonds is now at less than 10 cents on the EUR.

During today's trading session, the stock price fell 43%, after Thursday, it lost 63%.

Sources: ft.com, marketwatch.com, finance.yahoo.com