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  1. #1
    Thailand Expat harrybarracuda's Avatar
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    Wirecard: German payment company fails after GBP1.7Bn "Disappears"

    I would have thought the world would have learned from Enron, but it seems not.

    Scandal-hit payments firm Wirecard has filed for insolvency, causing its shares to dive almost 80%.

    It comes after the German firm last week disclosed a €1.9bn (1.7bn) hole in its accounts.

    Former boss Markus Braun has since been arrested and accused of inflating Wirecard's finances to make them appear healthier to investors and customers.


    The firm's creditors stand to lose billions of euros from the scandal.


    The controversy erupted last week when auditors EY refused to sign off on firm's company's accounts, having been unable to locate the missing €1.9bn.

    The Munich based firm, which employs almost 6,000 staff in 26 countries, initially claimed the money was held in accounts at two banks in the Philippines.

    But on Monday Wirecard said the money simply may not exist.

    In a statement on Thursday, the firm said its new management had decided to apply for insolvency at a Munich court "due to impending insolvency and over-indebtedness".

    The firm is also evaluating whether to file for insolvency proceedings for its subsidiaries.


    Wirecard, which was launched as a start-up in 1999, joined Germany's prestigious Dax 30 share index two years ago at a valuation of €24bn.


    But the company's shares have crashed almost 100% in the last week, giving it a stock market valuation of less than €400m.


    The Munich prosecutor's office, which is investigating Mr Braun, said it had now widened its investigation to look at others.


    Former chief operating officer Jan Marsalek is under suspicion and believed to be in the Philippines, according to the Reuters news agency.


    Meanwhile, Mr Braun has been freed on bail of €5m and remains a suspect.
    Wirecard: Scandal-hit firm files for insolvency - BBC News

  2. #2
    Thailand Expat harrybarracuda's Avatar
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    Very stinky indeed.

    Wirecard’s meltdown raises questions not just for Braun, a former KPMG consultant, but for auditors at EY and financial analysts who allegedly failed to spot the warning signs.

    <snip>

    “Sheep who love a rising share price, just embarrassing.” That was the withering assessment of fawning analysts received by shortseller Barry Norris in a text message from a hedge fund friend during a 2018 presentation to Wirecard investors.
    Norris, founder of Argonaut Capital, was one of the investors who bet that the company's share price would fall.
    He claims management evaded investors who asked tough questions and that he felt he was being “blackballed” when the firm repeatedly cancelled meetings with him.
    Before the full scale of the problems became clear last week, Norris said the company’s response to questions raised “more red flags than you would see at a communist rally”.
    “It was an incredibly hard company to analyse because they just decided to disclose nothing apart from a sales number and a profit number.
    “If you don’t give any information out, nobody can analyse it.”

    <snip>

    Felix Hufeld, head of Germany's financial regulator Bafin, admonished Wirecard’s management and EY this week for their role in the “complete disaster”.
    Bafin also has questions to answer, he admitted. The watchdog is under fire for its ban on shortsellers betting against the country’s fintech success story and its accusations of market manipulation by journalists who raised allegations of misconduct.
    “Wirecard’s close relationship with Bafin needs to be investigated,” Norris says. “In order to perpetuate the [alleged] deceit for such a long time, it’s impossible to think that Wirecard didn’t have influence in the regulatory body and in German politics.”

    <snip>

    Lenders may be reluctant to be seen to push the company over the edge by calling in their money but by failing to do so they are lending to a company that is being compared to US energy firm Enron, which was at the centre of a massive accounting scandal in 2001.
    Wirecard’s shares will fall to zero and the firm will go bust once the banks call in their loans, Norris predicts.
    Wirecard declined to comment.
    The Wirecard warning signs investors chose to ignore

  3. #3
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    Takeovers's Avatar
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    Lack of world wide controls. The bogus transactions were mostly in the Philippines and the german authorities did not feel responsible to check those.

    The world wide economy has huge control gaps.

    One could almost think these gaps are by design. But this is of course conspiracy theory territory.
    "don't attribute to malice what can be adequately explained by incompetence"

  4. #4
    Thailand Expat harrybarracuda's Avatar
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    Quote Originally Posted by Takeovers View Post
    Lack of world wide controls. The bogus transactions were mostly in the Philippines and the german authorities did not feel responsible to check those.

    The world wide economy has huge control gaps.

    One could almost think these gaps are by design. But this is of course conspiracy theory territory.
    People were sounding the alarm two years ago.

    This is what gets me about companies like EY: As the auditors, the shareholders should be suing the living fucking daylights out of them.

  5. #5
    Thailand Expat TheRealKW's Avatar
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    Quote Originally Posted by harrybarracuda View Post
    the shareholders should be suing the living fucking daylights out of them.
    Erm, they are. Now.

  6. #6
    Thailand Expat jabir's Avatar
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    Could go on for years, or till people find some new scandal to dwell on, maybe someone gets shamed or a smack or does time but the pink bit is that money's gone and not coming back.

  7. #7
    Thailand Expat harrybarracuda's Avatar
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    Might have known the Emiratis had a hand in it....


    Al Alam enters liquidation following KPMG's Wirecard audit - FinTech Futures

  8. #8
    Thailand Expat harrybarracuda's Avatar
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    Cunning plan... a bit of bait and switch with some crooked immigration officers.


    Faked immigration records in the Philippines were used to throw off authorities seeking a former executive at Wirecard AG, who went missing after the German firm was implicated in an accounting scandal.

    Immigration records seemed to indicate that Wirecard’s former second-in-command Jan Marsalek passed through the Philippines late last month. But video footage, airlines manifests and other records confirm that he never entered the country, Justice Secretary Menardo Guevarra said in a text message Saturday.


    “The investigation has now turned to the persons who made the false entries in the database, their motives, and their cohorts,” Guevarra said. “The immigration officers who encoded these fictitious entries have been relieved and are now facing administrative sanctions.”


    One of the two immigration personnel who had been relieved was stationed at the Mactan-Cebu International Airport and the other at the head office in Manila, Guevarra said separately on Sunday. They were transferred to other units pending investigation and will be slapped with appropriate sanctions should they be found culpable, he said. A fact-finding committee is looking if other persons were involved.

    Guevarra said the investigation would continue to determine whether criminal charges could be brought. The Financial Times first reported the fraudulent immigration records.


    Germany issued an arrest warrant for Marsalek after he was dismissed by Wirecard on June 22 and auditors couldn’t find about 1.9 billion euros ($2.1 billion) in cash at the payment processing company. The whereabouts of the former chief operating officer are still unknown.
    Separately, the Philippine central bank is investigating allegations that documents were forged purporting to show Wirecard had deposit accounts at two of the country’s lenders.
    Faked Philippine records left false trail for Wirecard exec

  9. #9
    I am no longer a Hostage
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    Sadly Harry is not to be trusted

    The full of himself punk, is a known liar

  10. #10
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    NamPikToot's Avatar
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    Well lets hope the UK institutions don't follow the EU high standards on this number..equivalency

  11. #11
    Thailand Expat harrybarracuda's Avatar
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    Quote Originally Posted by helge View Post
    Sadly Harry is not to be trusted

    The full of himself punk, is a known liar
    Looks like the boy has gone full retard.

  12. #12
    I am no longer a Hostage
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    Nah, but I don't like punks who can't back up, what their big mouth overflows with

    You're a liar

  13. #13
    Thailand Expat harrybarracuda's Avatar
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    Quote Originally Posted by helge View Post
    Nah, but I don't like punks who can't back up, what their big mouth overflows with

    You're a liar
    Woof! Woof! Here retard boy!


  14. #14
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    The PI is known for its banking secrecy laws and dodgy immigration officers. A few months ago, many immigration officers were sacked/ investigated because of the "pastillas" scandal. Pastillas is a sweet/ snack, made of cow's milk. The product is rolled up in paper - appears like a small tube. It was called the pastillas scandal bevause dodgy foreigners (mostly Chinese), would give rolls of money to immigration officers and they would be able to enter the country without papers/ records.

    For reference on pastillas scandal:

    Duterte relieves Immigration officials, staff tagged in 'pastillas' bribery scheme

    Then there's also the Bangladesh bank heist a few years ago, wherein the money of Bangladesh (in the US Federal Reserve bank) was siphoned off to a bank in PI, then transferred to casino accounts.

    Bangladesh bank heist
    That Insane, $81M Bangladesh Bank Heist? Here'''s What We Know | WIRED

    *******

    Given the history about the Bangladesh heist, I'm not surprised about Wirecard (sad to say, but it's the truth. Sigh...)

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