July 30, 2020 / 9:20 AM / 7 days ago

The rise and fall of Wirecard

(Reuters) - German payments firm Wirecard (WDIG.DE) collapsed in June after its auditor EY refused to sign off on the 2019 accounts, following months of investigation into missing 1.9 billion euros from its books, and forcing out Chief Executive Markus Braun.

FILE PHOTO: The logo of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions, is pictured at its headquarters in Aschheim, near Munich, Germany, July 1, 2020. REUTERS/Andreas Gebert/File Photo

The following timeline summarizes the developments that lead to the collapse of the company.

2020

April 28: An independent investigation by auditor KPMG finds that Wirecard did not provide sufficient documentation to address all allegations of accounting irregularities made by the Financial Times.

May 25: Publication of final 2019 results is postponed for a third time.

June 18: Auditor EY refuses to sign off Wirecard’s 2019 accounts as it was unable to confirm the existence of 1.9 billion euros (1.72 billion pounds)in cash balances on trust accounts, representing around a quarter of its balance sheet.

June 19: Wirecard’s CEO Markus Braun quits as firm’s search for missing cash hits a dead end in the Philippines and it scrambled to secure a financial lifeline from its banks.

June 22: Wirecard says that 1.9 billion euros it booked in its accounts likely never existed.

June 23: Wirecard’s former boss Markus Braun is releassed on bail after being arrested on suspicion of falsifying the company’s accounts.

June 25: Wirecard files for insolvency, owing creditors almost $4 billion after disclosing a gaping hole in its books.

June 29: A Munich court appoints Michael Jaffe to manage the insolvency of Wirecard.

July 1: Police and public prosecutors raid Wirecard’s headquarters in Munich and four properties in German and Austria as they widen their investigation into the company.

July 2: The head of Germany’s financial watchdog calls the accounting scandal at Wirecard “a massive criminal act”.

July 6: German prosecutors arrest the head of a Dubai-based subsidiary of Wirecard.

July 9: German state prosecutors start investigating individuals at Wirecard for suspected money laundering.

July 16: The former head of a Dubai-based subsidiary of Wirecard, who was arrested earlier in July admits wrongdoing to prosecutors for his role in a multi-billion-euro fraud.

July 22: German prosecutors arrest three former top executives of Wirecard, saying they suspected them of masterminding a criminal racket to fake the company’s accounts and bilk creditors of billions of euros.

2019

Jan. 30, 2019: Wirecard denies a report in the Financial Times that a Wirecard executive had used forged and backdated contracts in a string of suspicious transactions that raised questions about the integrity of the company's accounting practice. Wirecard, in a statement, called the report "false, inaccurate, misleading and defamatory.” [reut.rs/2PeqHRr]

March 28, 2019: Wirecard sues the Financial Times over a series of investigative reports that it said made use of, and misrepresented, business secrets. [reut.rs/2X9I8qS]

Oct. 21, 2019: The company hires KPMG to conduct an independent audit to address allegations by the Financial Times that its finance team had sought to inflate reported sales and profits.

BACK STORY

1999: Wirecard is founded in Munich.

2002: Markus Braun, previously a KPMG consultant, takes over as Chief Executive of Wirecard. [reut.rs/2WZDgER]

2005: Wirecard is listed on the Deutsche Boerse Frankfurt (Frankfurt Stock Exchange), Prime Standard segment.

2006: Consolidation of Wirecard Bank AG.

2007: Wirecard Asia Pacific established.

2010: Jan Marsalek appointed Chief Operating Officer at Wirecard.

2016: A negative report by short sellers Zatarra Research alleges fraudulent activity at Wirecard, saying senior executives have committed money laundering offences, as well as defrauding Mastercard and Visa. [bit.ly/39HDepW]

2018: Wirecard joins the blue chip market index Deutscher Aktienindex (DAX), making it officially one of the 30 most valuable German companies listed on the Frankfurt Stock Exchange

Reporting by Tommy Lund, Jagoda Darlak and Bartosz Dabrowski; Editing by Douglas Busvine and Tomasz Janowski

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