Investor rights lawyers investigate Wirecard securities fraud
White-collar crime investigators raided Wirecard’s offices in Singapore multiple times.
Wirecard’s rise has been plagued by intermittent controversy about its accounting and business practices, according to the FT. Moreover, two law firms, Faruqi & Faruqi, a national securities law firm, and Bernstein Liebhard, an investor rights law firm, are both investigating potential securities fraud claims on behalf of shareholders of Wirecard.
Earlier this year, white-collar crime investigators raided Wirecard’s offices in Singapore multiple times in connection with allegations that sales and profits were invented at numerous subsidiaries across Asia. Edo Kurniawan, the company’s head of international reporting, was named among six suspects.
Read more: Wirecard under fraud investigation by Singapore police
In response, Markus Braun, Wirecard’s Austrian chief executive, dismissed the problems as a local difficulty with scant financial impact. He blamed the payment processing company’s fast growth and outlined a dozen measures to improve compliance, including the appointment of a new chairman of the supervisory board in 2020. Wirecard’s stock price, which initially fell 40 per cent to €97, has since recovered to about €140, giving it a €17bn market capitalisation.
Additionally, the Financial Times has published documents which cast further doubt on Wirecard’s accounting practices.
The international news outlet has acquired internal company spreadsheets, along with related correspondence between senior members of Wirecard’s finance team, which appear to indicate a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead EY, Wirecard’s tier-one auditor.
The decision to publish these documents follows repeated charges by Wirecard that the FT was relying on fake material and that its own journalism is corrupt and suspect. The documents, provided by whistleblowers, give the clearest picture to date of Wirecard’s questionable accounting practices and business model.
Read more: SoftBank invests €900m in Wirecard for APAC push
In its defence, Wirecard has claimed that FT reporters have facilitated market manipulation in collusion with short sellers. These allegations have been widely circulated in the German media and are the subject of a legal complaint in Germany, an investigation by BaFin, the German financial regulator, and a probe by prosecutors in Munich.
The news outlet categorically rejects Wirecard’s allegations on all counts. A recently concluded two-month review conducted by an external law firm, RPC, found no evidence of collusion between FT reporters and market participants.
