Wirecard: bankruptcy, breakdown and failure

VA year and a half ago, the Wirecard boss was still on top: “When all the noise and dust has subsided, Wirecard will be a company that generates one billion euros in Ebitda this year and is one of the fastest growing in the industry” – wrote Markus Braun on May 17th on Twitter. From today’s perspective, the perseverance slogan to its long-suffering shareholders seems bizarre. The question arises: Was there an ignorant victim of sinister machinations in the company he runs, or an unscrupulous perpetrator with high criminal energy? Finding the answer will keep law enforcement busy for years to come.

Marcus Theurer

Marcus Theurer

Editor in the economy of the Frankfurter Allgemeine Sonntagszeitung.

In the end, everything went extremely quickly at Wirecard. Less than two weeks ago, at least the very big optimists among the shareholders could still hope that everything would turn out for the better somehow. The final crash of the Wirecard share then began on Thursday, June 18. Instead of finally publishing its overdue annual accounts, the group confessed that cash accounts of EUR 1.9 billion in trust accounts in Asia had vanished without a trace. The total corresponded to around a quarter of Wirecard’s total assets.

Now things went very quickly: the resignation of the long-time “mastermind” Braun, celebrated by his supporters, an arrest warrant against the manager, who is now only on bail – and finally the bankruptcy application. The flash-off for Wirecard is in a strange contrast to the long history of this scandal surrounding the payment service provider from the Munich suburb of Aschheim: As early as summer 2008, rumors that Wirecard had dubious balance sheet tricks caused the share to become weak.

At that time there was also talk of possible money laundering. Markus Braun reacted as he should do it again and again in the following twelve years: everything clean, everything complies with us. The critics simply did not understand Wirecard’s business model. According to this pattern, the game was repeated over and over a decade: new and increasingly concrete allegations, crazy courses, calming pills from management. Now the game is over.

Behavior of the auditor EY “completely out of the question”

The damage caused by the Wirecard scandal extends far beyond the company. Felix Hufeld, President of the German Financial Supervisory Authority, described as a “shame” for Germany and a “total disaster” Bafin the events. His house was “not effective enough” to prevent the Wirecard crash. He didn’t get more specific. Never before has a stock exchange listed in the leading German index Dax gone bankrupt. Analysts, fund managers, auditors, financial supervisors, creditor banks – all of them now stand as good faith idiots. Last but not least, the behavior of the auditing firm EY, which has audited Wirecard’s annual accounts for many years, causes great annoyance in financial circles. EY presented itself as a victim of fraud this week without admitting any omissions. “They make themselves invisible, that is completely out of the question,” says one of the participants.

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