FinTech Payments

EY Says Wirecard Gave False Statements During 2019 Audit

June 26, 2020 at 11:28AM

According to auditor Ernst & Young (EY), German payment processor Wirecard knowingly gave false statements and was in the midst of “elaborate and sophisticated fraud involving multiple parties around the world” in regards to $2.1 billion on its books that may not exist.

The company was involved in deliberate deceit and had given false statements on escrow while EY was carrying out the 2019 audit of the company, which EY took to the relevant authorities, Reuters reported.

As the case of billions of missing dollars unfolded, Wirecard had to file for insolvency on Thursday (June 25) amid a loss of 90 percent of its shares and over $12 billion in market value.

The matter concerns the $2.1 billion, which was roughly around a quarter of the company’s books and which no one could prove existed. Wirecard said it had deposited money in two banks in the Philippines, but when the island nation launched an investigation, it found that the money had never been deposited there.

EY said it seemed that fraudulent balance confirmations had been made by Wirecard to auditors in order to craft a dishonest perception of the amount of money Wirecard had overall.

The controversy saw the outings of several top Wirecard officials earlier in the week, including founder and CEO Markus Braun, who was arrested earlier this week on charges of manipulating the market and misrepresenting accounts. He posted 5 million euros in bail and was released on Tuesday (June 23). Thus far, he has denied any wrongdoing.

The Wall Street Journal characterized the fall of Wirecard as the demise of a former “rising star” that was previously thought to be on the cutting edge of the European tech scene. The 50-year-old Braun oversaw the company’s shares rising and claimed the company’s payment processing machinations would be a massive boost for worldwide commerce.

EY said it was continuing to do the work on reporting to authorities, according to Reuters.

EY Says Wirecard Gave False Statements During 2019 Audit …

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