FRANKFURT/SINGAPORE (Reuters) – Wirecard said that a law firm it appointed has made no conclusive findings of criminal misconduct by any employee of the German payments firm and that there are indications the allegations stemmed from a quarrel between employees.
FILE PHOTO: People walk past the Wirecard booth at the computer games fair Gamescom in Cologne, Germany, August 22, 2018. REUTERS/Wolfgang Rattay
Shares in the German member of the blue-chip DAX index were indicated to jump 15 percent on Monday.
The Financial Times last week published two reports about alleged wrongdoing at Wirecard’s Singaporean office that sent shares 40 percent lower.
Singaporean police on Monday said they were looking into the reports of alleged financial irregularities. Wirecard has called these reports “inaccurate, misleading and defamatory”.
Wirecard said on Monday that in April 2018, a member of its Singapore team raised concerns about alleged actions of a finance team member in Singapore.
The company then started an investigation, which found no evidence to support the allegations. “Furthermore, there were indications that the allegations could be related to personal animosity between the employees involved,” the company said.
Nonetheless, Wirecard hired Singaporean law firm Rajah & Tann for a review which is about to be completed, but which has so far not found evidence of criminal misconduct, the electronic payments company said.
Chief Executive Markus Braun told German daily Handelsblatt on Monday: “We didn’t have to make any corrections or adjustments to our accounting.”
Wirecard said in its statement that the allegations related to potential compliance breaches between 2015 and 2018 totaling revenue of 6.9 million euros and costs of 4.1 million.
The second FT report published on Friday, which wiped $5.7 billion off the company’s market value, said Rajah & Tann had found evidence indicating “serious offences of forgery and/or of falsification of accounts” at Wirecard.
Rajah & Tann was not available for immediate comment after Wirecard published its statement on Monday.
Munich-based Wirecard has been a repeated target of short-sellers – investors betting on falling share prices – who have questioned its accounting methods and rapid international expansion in recent years.
These speculative attacks have caused huge volatility in Wirecard’s stock, though its share price has rebounded repeatedly, with the company last year entering the DAX.
The Munich state prosecutor’s office on Friday said it had found no evidence of the alleged wrongdoing reported by the FT.
Wirecard is set to hold a conference call on Monday at 1300 CET (1200 GMT/2000 Singapore time).
Additional reporting by Arno Schuetze; editing by Jason Neely