Technology

Wirecard hires KPMG for independent audit after Financial Times allegations

BERLIN (Reuters) – German payments company Wirecard (WDIG.DE) has hired 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, it said on Monday.

FILE PHOTO: The headquarters of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions is seen in Aschheim near Munich, Germany April 25, 2019. REUTERS/Michael Dalder

The company, promoted to the DAX blue-chip index last year, has been the target of a series of investigative reports by FT reporter Dan McCrum, with the latest, on Oct. 15, knocking more than 20% off its share price.

It has rejected the newspaper’s latest allegations, based on internal spreadsheets and correspondence, that Wirecard’s senior finance team had sought to inflate reported sales and profits at its businesses in Dubai and Ireland.

The FT’s reporting has however led to calls on Wirecard from investors and corporate governance advocates to hire an outside auditor both to clear up the matter and to demonstrate that it meets the governance standards of a top-tier public company.

“We have complete confidence in the audit procedures performed to date and their results. We assume this renewed independent review will lead to a final end to all further speculation,” Wulf Matthias, chairman of Wirecard AG’s supervisory board, said in a statement.

Wirecard shares rose by 3.5% in pre-market trading in Frankfurt.

The audit will begin immediately, Wirecard said, adding that KPMG would report to the company’s supervisory board and have unrestricted access to information at all levels of the group.

Thomas Eichelmann, chairman of the audit committee of Wirecard’s supervisory board and a former chief financial officer of Deutsche Boerse AG (DB1Gn.DE), will support the audit on behalf of Wirecard.

Wirecard has long been a favorite target of short sellers, or speculators who seek to profit from the airing of negative information that drives down a company’s share price.

It has accused the FT and reporter McCrum of colluding with short sellers, as well as suing the newspaper. Financial Times Editor Lionel Barber has said an investigation by an outside law firm found no evidence to support those claims.

In-house auditor EY signed off on Wirecard’s 2018 accounts in April after an earlier FT story alleged fraud and false accounting at the company’s Singapore office.

An investigation by an outside law firm found no evidence of criminal wrongdoing by head office, although Singapore staff may have broken local laws, Wirecard said at the time.

Separately, German prosecutors are investigating a group of individuals on suspicion of manipulating Wirecard stock, acting on evidence provided by financial market regulator Bafin.

Reporting by Douglas Busvine; Editing by Emma Thomasson and Jan Harvey

Our Standards:The Thomson Reuters Trust Principles.

Related posts

South Korean chat app becomes new outlet for #MeToo movement

news

China’s Xiaomi picks Hong Kong for $10 billion IPO, lifts lid on financials

news

Vietnam lawmakers approve cyber law, tighten rules on Google, Facebook

news

Leave a Comment