Business

Wirecard says it will continue operating despite filing for insolvency

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FRANKFURT AM MAIN/BERLIN (AFP, REUTERS) – German payments provider Wirecard said on Saturday (June 27) that it would continue to operate despite filing for insolvency following a vast accounting fraud scandal.

The group admitted this week that €1.9 billion (S$2.97 billion) missing from its accounts likely does not exist, in a spiralling saga that has stunned Germany and evoked memories of the Enron scandal in the United States.

Just hours after Wirecard opened insolvency proceedings at a court in Munich on Thursday, auditing company EY accused the company of carrying out an "elaborate and sophisticated fraud" across the world "with a deliberate aim of deception".

But on Saturday, the group said its business activities "will be continued".

"The management board is of the opinion that continuation is in the best interests of the creditors," it said in a statement.

"With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present."

Payments for merchants of the firm's banking arm, Wirecard Bank, "will continue to be executed without restrictions", it added.

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The insolvency filing did not include the Wirecard Bank unit, which holds an estimated €1.4 billion in deposits and is already under emergency management by BaFin, the German banking regulator.

The firm is also "in constant contact with the credit card organisations", the statement said.

Credit card giants Visa and Mastercard are considering cutting ties with Wirecard, according to a Bloomberg report.

Britain's financial watchdog FCA meanwhile has frozen Wirecard's operations there to protect its users' funds.

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