Wirecard is scrambling to find €1.9bn (£1.7bn) that has gone missing from its accounts, after blaming “possibly fraudulent” transactions for the lost funds.
The Munich-based group will now be forced to postpone the publication of its financial results for the fourth time this year, after EY, its auditor, refused to sign off its accounts.
According to Wirecard, EY informed the group that “no sufficient audit evidence” could be obtained of the missing £1.7bn figure which accounts for approximately a quarter of its consolidated balance sheet total.
It was yesterday confirmed that if the group cannot publish its results by today (19 June), its lenders will be able to call in €2bn (£1.8bn) worth of loans.
It comes after subsidiaries of Wirecard paid “substantial” security deposits of €1.9bn (£1.7bn) into escrow accounts in order to guarantee risk management for participating merchants.
The banks managing the escrow accounts are two Asian banks, with the trustee holding numerous mandates in Asia.
Markus Braun, CEO of Wirecard AG, said: “We are in contact with the trustee present on site. Previously issued confirmations by the banks were no longer recognised by the auditor.
“All parties involved are endeavouring to clarify the matter as quickly as possible. It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred. Wirecard AG will file a complaint against unknown persons.”
In a statement, the payments firm said: “There are indications that spurious balance confirmations had been provided from the side of the trustee respectively of the trustee’s account holding banks to the auditor in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts for to the benefit of Wirecard group companies.
“The Wirecard management board is working intensively together with the auditor towards a clarification of the situation.”
It added: “In light of the above the audit of the annual and the consolidated financial statements 2019 will not be concluded as planned by June 18, 2020. A new date will be announced.
“If certified annual and consolidated financial statements cannot be made available until June 19, 2020, loans made to Wirecard AG amounting to approximately €2 billion can be terminated.”
Following news of the missing funds, Wirecard also announced that management board member Jan Marsalek has been “suspended on a revocable basis” until 30 June.
James Freis, Jr. has instead been appointed with immediate effect as member of the management board responsible for compliance.