Industry News

Wirecard Sues FT; Raid Sends Shares Plummeting

German payments company Wirecard saw its shares drop 10 percent on Friday (Feb. 8) following a raid by Singapore police on its offices there, according to a report from CNBC.

Earlier in the day, shares were higher after the company announced it planned to sue media company Financial Times for what it called “unethical reporting” into how the German company handled its books.

“Wirecard notes yesterday’s article in the Financial Times. This is the third time that the same highly confidential documents from a compliance audit have been used as the basis for a defamatory media coverage,” the company said.

It went on to say that “these allegations have been investigated in a robust compliance process both by our internal compliance team and by an independent investigation.“

Wirecard said there was no evidence of wrongdoing and that it was “taking legal actions against the FT and its unethical reporting.”

The Financial Times reported that the firm may have been involved in “book-padding” in the Singapore office. It also said that higher-ups at Wirecard forged and backdated contracts, potentially to lie to the public and inflate revenue. That report, which was published on Jan. 30, sent shares down almost 20 percent.

In Munich, a prosecutor launched an investigation into Wirecard involving potential manipulation of the market, as well.

The Financial Times described a whistleblower who tipped off the organization about the actions, and did so because no one at the company seemed to be doing anything about the fraudulent activity.

In the follow-up piece, the FT described the alleged scheme, calling it “a practice known as ‘round tripping,’ (where) a lump of money would leave the bank Wirecard owns in Germany, show its face on the balance sheet of a dormant subsidiary in Hong Kong, depart to sit momentarily in the books of an external ‘customer,’ then travel back to Wirecard in India, where it would look to local auditors like legitimate business revenue.”



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