The German electronic payment methods company Wirecard announced on Thursday (06/25/2020) that it’s preparing the insolvency application after revealing an accounting hole in its accounts of 2.1 billion euros.
It seems like the German firm has been involved in a millionaire fraud, and it’s not the first time they’ve been in “the eye of the storm”. Wirecard was accused of accounting irregularities in Asia and money laundering in early 2019 by the British newspaper Financial Times. Still, it is not clear who is responsible, but Ex-Wirecard chief Markus Braun got arrested with suspicions of false accounting and market manipulation.
Wirecard’s admission of €1.9bn went missing a week ago, which created the catalyst for the company’s unravelling. The bankruptcy filing hurt the shareholding board, which is 200 out of 5,700 staff Wirecard said.
Regardless of what Wirecard says…
The large number of 5,700 employees is at risk.
The German financial services supervisory authority Bafin made a self-criticism statement saying: “We have not been effective enough to avoid such a case,”. President Felix Hufeld also admitted that this scandal is a “total disaster”.
The organization’s history goes back over a decade. Back then, VP of the German Investor Protection Association (SDK) Markus Straub, shared his doubts regarding Wirecard’s abnormalities. Regardless of this situation, Straub himself wagered on the organization’s offer value drop. As a result, Straub got sentenced for advertising control.
Additionally, another “attack” took place back in 2016, when an extensive report by an investigator firm called Zatarra showed up, providing details regarding asserted crimes on Wirecard. There, as well, the stock cost dove.
Today the situation is way more complicated, and with no doubt, there is uncertainty about the firm’s future.
Wirecard shares plummet 97% in one week.
Wirecard’s share price has plummeted 78.24% this Thursday, reaching for the first time 2.68 euros per share. The shares closed on Wednesday 24/06/2020 at 12.3 euros and registered a rate of 11.53 euros after the bell rang this Thursday on the Frankfurt Stock Exchange.
After revealing that the firm had declared itself in the suspension of payments its trading had been interrupted for an hour and then plummeted to an intraday low of 2.50 euros.
Since the company informed the market that the auditor was unable to certify its accounts because 1.9 billion euros were missing, the share price plummeted more than 97%, from the 104.5 euros it registered on June 17th. In August 2018, the company recorded its highest historical price, of 191.3 euros per share.
Wirecard’s bankruptcy was recognized as one of the most renamed technology companies in Germany, representing one of the worst corporate failures in the country.