Wirecard’s feud with the Financial Times has escalated to absurd new heights.
One day after Wirecard trumpeted findings from Singaporean law firm Rajah & Tann’s investigation into allegations of widespread accounting fraud at the German payments processor – a report that purportedly vindicating the company’s management – Wirecard is following through on threats to sue the British business newspaper over what Wirecard’s lawyers described as “unproven and false allegations” made in a series of blockbuster exposes.
The company has filed suit against the FT and Dan McCrum, one of the investigative reporters who helped break the story, in a Munich court, according to Reuters:
Wirecard has filed a suit at the Munich regional court against both the FT and its reporter, Dan McCrum, seeking a ruling on the merits of its case. If successful, the company would then press for monetary redress.
“Our objective is to seek a halt to the incorrect use of business secrets for the purposes of reporting, as well as damages,” Wirecard said in a statement. No comment was immediately available from the FT.
The fightback comes after the FT alleged in January that Wirecard’s Singapore staff had engaged in fraud and false accounting, basing its reporting on a law firm’s probe of allegations made by an unnamed whistleblower.
Using a preliminary copy of R&T’s reports as its primary source, the FT reported that Wirecard managers, under pressure to win approval from regulators and customers, had fudged the company’s transaction numbers. The reports suggested that the practice had been tacitly approved by the corporate office in Frankfurt, and was widespread throughout Wirecard’s global operations.
However, in its final report, which arrived at conclusions that were very different from the preliminary cited by the FT, R&T concluded that although employees involved in its Asian operations may have committed fraud, these distortions were “not material” to the company’s financial reports. Furthermore, there was no evidence to suggest that the headquarters in Frankfurt was complicit. At least, that’s what Wirecard said: The report itself hasn’t been released; Wirecard merely released a summary of the firm’s findings.
The FT wiped billions of dollars off Wirecard’s market capitalization after the paper published its first report in late January, which alleged that a Wirecard manager had used forged and backdated contracts to manipulate the company’s numbers. But on Wednesday, Wirecard shares surged nearly 30% intraday and notched their best daily performance in ten years after Wirecard released the conclusions from the R&T report.
From the beginning, Wirecard denied what it claimed were “false, inaccurate, misleading and defamatory” allegations, and almost right away, the authorities in Frankfurt appeared to side with the company. In February, German prosecutors opened an investigation into the FT reporter who broke the story. Using a tactic apparently cribbed from regulators in Beijing, Germany’s market authorities briefly banned short-selling in Wirecard’s shares (presumably for fear that it could drag down the DAX, which would weigh on broader European markets).
For its part, the FT has robustly denied allegations that its reporters were involved in some kind of shady market manipulation (see this Alphaville piece for one of the msot entertaining rebuttals we’ve ever read). While Wirecard shareholders celebrated on Wednesday, the FT published a deeper analysis of Wirecard’s statements and pointed out some inconsistencies that might have given investors pause.
via ZeroHedge News https://ift.tt/2uwKzoH Tyler Durden