Wirecard bulls, and anybody who bought the dip in the German fintech darling’s shares after allegations of widespread accounting fraud surfaced earlier this year, can breath a sigh of relief – for now, at least.
In a final report on the allegations published by the renowned Asian law firm Rajah & Tann, which had been hired by Wirecard to conduct an external probe, R&T determined that the alleged accounting manipulation was isolated to the company’s Singapore operations, and that the company’s leaders in Germany weren’t involved and likely weren’t aware. This contradicts a report by the FT, which cited a whistleblower and leaked documents from the firm’s investigation to suggest that the deceitful practices were part of the firm’s global growth strategy as it sought regulatory approval from various governments across Asia.
The report acknowledged a number of accounting oversights, and said the allegations could potentially lead to criminal liability for some of the firm’s managers in Singapore. But the sums involved were not significant for a company with more than 2 billion euros ($2.3 billion) in annual sales.
Here’s more from Bloomberg:
Wirecard employees “wrongfully” recorded 2.5 million euros of revenue in 2017 and improperly accounted for a 3 million-euro asset for one week in 2018, the company said, citing findings from Singapore-based firm Rajah & Tann. While dubious contracts were prepared, none of the funds — except for one transaction of 63,000 euros — flowed to Wirecard affiliates, the company said.
The company’s shares soared as much as 32% on the news, the largest one-day gain for the stock, which recently replaced Commerzbank in one of Germany’s most widely followed stock-market indexes, since October 2008.
To be sure, this doesn’t mean Wirecard is out of the woods: Authorities in Singapore are still investigating the allegations, and recently raided the company’s offices. In an attempt to stop Wirecard from dragging down the broader European equity market, German regulators briefly prohibited short-selling in WC’s shares, in a move that many remarked was reminiscent of the selling bans enforced by Chinese authorities during a panic in their domestic market.
via ZeroHedge News https://ift.tt/2HHC4zY Tyler Durden