The Financial Times is a credible source

New allegations against Wirecard because of opaque partner companies

The latest report assumes that Wirecard will conduct a very large part of its business through external payment service providers. Accordingly, sales from business with license partners of over 931 million euros were planned at the beginning of 2018. That was around half of the revenue targeted for 2018. According to preliminary figures presented by the group on January 30th, Wirecard achieved total sales of 2.1 billion euros last year.

With more than twelve partner companies, however, the supposed size and reality should differ significantly from each other. For example, the company addresses would have led the journalists to the private house of a former sailor, an empty warehouse and the offices of a bus company. Wirecard is said to have earned millions in commission income through the company.

In addition, the business newspaper published possible inconsistencies in connection with other Wirecard partners in the Philippines who are said to have debts with Wirecard.

As in the weeks before, Wirecard denies the allegations. "The inaccurate information published today was deliberately misquoted by the FT to further distort fact and fiction," said a statement released shortly after the new allegations became known.

The payment service provider also explains details about its business model. Accordingly, more than 50 percent of Wirecard's transaction volume comes from regions such as the USA, Latin America and Asia. Wirecard does not currently have its own licenses there to process payments. Instead, the company works there with partners such as local financial institutions and service providers.

"This is common practice with large multinational payment companies to meet specific local customer and compliance requirements," it says literally. Customers using these services ranged from governments to local micro-entrepreneurs as well as some of the world's largest retail and travel companies.

Five local licenses for Wirecard last year

However, the proportion of transactions processed within the framework of license partnerships continues to decline. Wirecard is continuously striving to obtain its own domestic licenses, it said. Last year alone, five more local licenses were added.

Wirecard did not want to comment directly on the details of the cooperation with the companies mentioned. You cannot comment on individual customer, supplier or partner relationships without the consent of those affected.

Wirecard filed a lawsuit against the Financial Times and its author Dan McCrum at the Munich Regional Court on Thursday. Wirecard justified the legal step with a series of false and misleading information published by the business newspaper since the end of January. "The aim on our part is to refrain from improper use of trade secrets for reporting and compensation," said a brief explanation.

On Friday, Wirecard was a little more specific: A procedure was initiated because of the repeated misrepresentation of confidential information and / or trade secrets as well as the miscitation of documents.

There are also indications that market participants were informed in advance of the publication of the first report. "After our declaratory action against the" Financial Times "and a journalist, I am not ruling out further legal action," said CEO Markus Braun of the "FAZ".

A spokesman at the Munich Regional Court did not want to confirm receipt of the lawsuit. This is mainly due to the short time that has passed since the possible receipt of the lawsuit. "First the defendants must be informed of a possible lawsuit before we can officially comment on it," the spokesman said. That could take a good three to four weeks.

On Tuesday afternoon, the Wirecard share had soared by up to 30 percent after the company had presented the long-awaited final report from the law firm Rajah & Tann from Singapore. She was commissioned by Wirecard to deal externally with allegations in the Singapore branch that were a good year ago. The allegations of fraud, account manipulation and money laundering were in the room.

The lawyers did find some incorrect postings in the millions from previous years as well as draft contracts that may not have been based on business transactions. In the headquarters in Aschheim near Munich, however, no top managers who could be proven were affected, it said. Only a few local employees in Singapore could possibly have been guilty under local law.

Even if this seems to invalidate at least some of the allegations against Wirecard, the results of the investigations by the public prosecutor in Singapore are still pending. The officials had searched the business premises in Singapore three times in the past few weeks and seized 229 boxes of material.

However, the measure has no influence on investigations in Germany. "There are still no preliminary proceedings against Wirecard here," explained the senior public prosecutor Hildegard Bäuler-Hösl, who is responsible for commercial criminal matters, to the Handelsblatt on Friday. Accordingly, there was also no request for legal assistance to the colleagues in Singapore.