German FinTech business Wirecard collapsed back in June when its auditor EY refused to sign off on the 2019 financial accounts, following months of investigation into missing money from, and forcing out CEO Markus Braun.
The following timeline summarises the developments that lead to the collapse of the company.
- 22nd July: 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
- 16th July: 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
- 9th July: German state prosecutors start investigating individuals at Wirecard for suspected money laundering
- 6th July: German prosecutors arrest the head of a Dubai-based subsidiary of Wirecard
- 2nd July: The head of Germany’s financial watchdog calls the accounting scandal at Wirecard “a massive criminal act”
- 1st July: 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.
- 29th June: A Munich court appoints Michael Jaffe to manage the insolvency of Wirecard
- 25th June: The company files for insolvency, owing creditors almost $4 billion after disclosing a massive hole in its books
- 23rd June: Wirecard’s former boss Markus Braun is released on bail after being arrested on suspicion of falsifying the company’s accounts
- 22nd June: Wirecard says that 1.9 billion euros it booked in its accounts likely never existed
- 19th June: Wirecard’s CEO Markus Braun quits as the search for missing cash hits a dead end in the Philippines and it scrambled to secure a financial lifeline from its banks
- 18th June: Auditor EY refuses to sign off on Wirecard’s 2019 accounts. The auditor was unable to confirm the existence of 1.9 billion euros (approximately $2.23 billion) in cash balances on trust accounts. This represents approximately a quarter of its balance sheet
- 25th May: Publication of final 2019 financial results is postponed for a third time
- 28th April: 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
- 21st October: 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
- 28th March: Wirecard sues the Financial Times newspaper over a series of investigative reports that it said made use of, and misrepresented, business secrets
- 30th January: 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.”
- 2018: Wirecard joins the DAX, making it officially one of the 30 most valuable German companies listed on the Frankfurt Stock Exchange
- 2016: A negative report by short sellers Zatarra Research alleges fraudulent activity at Wirecard. The report says senior executives have committed money laundering offences, as well as defrauding Mastercard and Visa
- 2010: Jan Marsalek appointed as the COO at Wirecard
- 2007: Wirecard Asia Pacific established
- 2006: Consolidation of Wirecard Bank AG
- 2005: Wirecard is listed on the Frankfurt Stock Exchange, Prime Standard segment
- 2002: Markus Braun, previously a KPMG consultant, takes over as CEO of Wirecard
- 1999: Wirecard is founded in Munich
The team at Platform Executive hope you have enjoyed the ‘Wirecard: The rise and fall of the German FinTech‘ article. Initial reporting via our content partners at Thomson Reuters. Reporting by Tommy Lund, Jagoda Darlak and Bartosz Dabrowski. Editing by Douglas Busvine and Tomasz Janowski.