Wirecard's online payment business became a stock market darling – until its share price tanked. The story of the company and its market misfortune is a veritable whodunit about hubris and speculation in the digital age Wirecard
inging in the new year in Asia has become a big source of revenue for the Germans. In places like Singapore, Taiwan and Hong Kong, families gather around tables overflowing with steamed fish, rice cakes, dumplings and mandarins to celebrate the occasion. Cooking all that food used to take the better part of a week, but these days, more and more people are simply ordering their banquets via app. They let the restaurants do the work for them and have the food delivered to their homes.
Reporting by the Süddeutsche Zeitung has exposed the details of this economic crime thriller, which lays bare much about spectacular success stories in the digital age - and their pitfalls. Internal emails and chats tell the story of a company whose transformation from a startup on the outskirts of Munich to a globally active, DAX-listed company was breathtakingly fast.
Some employees joke about the fact that Wirecard abbreviates itself as "WD" - "WC" is not an option, since that acronym is already reserved for "water closet" in most countries. Employees communicate with each other, and even their superiors, via messaging apps, conversing about professional and personal matters or the best restaurants and clubs in Bali or Shanghai.
Wirecard's business in Asia does, in fact, make a chaotic impression. At one point, employees complained the figures appeared to just be "flying around." At then they warned it would soon become impossible to continue paying the employees of a subsidiary. In June 2017, an employee wrote Edo K. that at least two Wirecard companies were "in operative deficit and technically insolvent.
Early on it became clear that the two lawyers considered Edo K. to be a charlatan and wondered why the head office in Munich seemed to trust this man so blindly. Gossip in the Singapore office holds that Royston N. once confronted Edo K. with the accusation that one of his family members was close to the Indonesian mafia and that Edo K. apparently got extremely upset. According to the story, Edo K. then told Royston N. he could go ahead and ask the relative and see what would happen. Royston N.
Rajah & Tann identified more than a dozen of these suspected phony entries, which gave rise to a serious suspicion: Did Wirecard in Asia have dubious money flows, in which a given amount of money was used in more than one place to patch up holes in the company's books? This suspicion could give the devastating impression that the DAX-listed company shone brighter on the stock exchange than it did in reality.
"I don't understand. What is going on?" one of the two lawyers wrote in a group chat with the German compliance chief in Aschheim. "Is it that the Board doesn’t understand?" His colleague in Singapore backed him up: "I do not understand how a few individuals can commit a variety of extremely serious financial crimes and continue to operate with impunity.
Nine months later, the escalation reached a preliminary climax: On Jan. 30, 2019, the Financial Times reported on the case and Wirecard's share price plummeted. Shortly thereafter, company COO Jan Marsalek received a chat message from a confidant containing a rather dubious offer. A businessman, who was said to be well-connected with journalists, claimed that a second influential media outlet was also planning to publish a devastating report about Wirecard.
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Der Phönix aus AschheimIn einem Münchner Vorort gestartet, wurde Wirecard mit seinem Internet-Bezahlgeschäft zum Börsenliebling. Dann stürzte die Aktie ab. Ein Wirtschaftskrimi über Hybris und Spekulantentum im Online-Zeitalter.
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