Is Wirecard round tripping with Singapore entities?

September 9, 2019

As we’ve been searching for where Wirecard’s MCA business is (and the bulk of it looks not to be in Brazil, Turkey or Europe), we’ve come across a number of details that have made us take a second look at certain aspects of the business. There are some very odd coincidences and complicated relationships between Wirecard, its current and former executives, and third-party companies, many of which are suspicious in themselves, and, when taken together, raise yet more questions.

What we have found

A company in Singapore, oCap Management, formerly called Senjo Trading, whose MD, Carlos Haeuser worked for 13 years at Wirecard as a senior executive, started claiming to offer merchant cash advance in Singapore in November 2018 at around the same time it received €115M ($131M) of funding from an unknown third party. (Coincidentally, this is also the time when Wirecard started talking about MCA). By the end of December 2018, €113M of these funds had been lent out by oCap, without any sales people and without any advertising spend, and with distribution expenses of just $38K.

Until 2017, oCap was involved in trade financing and ship management, but also referenced etrade finance and blockchain technology on their website. However with Carlos’ arrival, and promotion to MD on the 9th of November 2018, the business shifted tack to offer MCA. Their level of success in just one month seems remarkable considering that, despite claiming to have facilitated $100M of loans in 2017 they had zero revenues in 2017 from interest income. Rather, in 2017 all revenues – on the basis of their audited accounts – were derived from ship management fees.

Following the €115M loan in late 2018, and in just 6 weeks, oCap somehow lent all that of money onwards in EUR, USD and GBP denominated loans from Singapore.

Furthermore in 1Q19, when Wirecard’s MCA program grew further to €400M, oCap formed a Luxembourg subsidiary that is described as “acquiring or assuming the risks associated with loans receivable”.

Why do we think this is interesting?

oCap has multiple close ties to Wirecard, making the timing of their MCA business launch interesting:

  • oCap was formerly known as Senjo Trading. Wirecard lent €25M to Senjo Group, a related business, in May 2017. Senjo was also widely reported as being a material driver of Wirecard revenues, EBITDA and receivables.
  • oCap’s CEO and MD, Carlos Haeuser had been a long-serving Wirecard executive, joining the firm in 2005 and promoted to EVP in 2010. He left the business in March 2018 to join oCap, although paperwork suggests there was some overlap between his time at Wirecard and oCap with his new appointment as director of oCap taking place on 5th March while he only officially left his previous roles as CEO of Wirecard Turkey and CEO of Wirecard Technologies on 15 March 2018 and 22 March 2018 respectively (Source). Of course, it’s also interesting that Turkey is where Wirecard has previously claimed to be doing significant volumes of MCA despite their audited financials showing nothing of the sort and worth remembering that MCA is illegal in Turkey.
  • oCap has also had two auditor resignations so far in 2019. T Ravi, their auditor of 2016 and 2017 resigned in early February 2019 to be replaced by BDO, who resigned in July 2019 without signing the 2018 financials. They were replaced by the less well known OA Assurance who eventually signed the annual report in August 2019. Related party disclosures changed between the 2017 and 2018 accounts – perhaps this is why BDO did not sign the accounts?

Why is this relevant?

While this could all be a coincidence, it is worth examining closely in light of the criminal “round-tripping” investigation that Wirecard is facing in Singapore, where the CAD is investigating Wirecard for allegedly moving money from its balance sheet to undisclosed related parties and then back as revenue, earlier in 2018 than the events described above. We think the CAD in Singapore should be aware of the suspicious timing and similarities of these events.

The FT has previously reported that Senjo (now oCap) had significant unpaid receivables at Wirecard and that a substantial portion of their revenues and EBITDA come from Senjo. It seems reasonable to conclude that Wirecard was the 3rd party that lent the €115M to Senjo. If any of this money has made it back to Wirecard to pay-off the receivables that are owed by Senjo/oCap – that would be round-tripping.

If any of this is true, investors should be very concerned about the quality of that EBITDA given the very curious accounts at oCap / Senjo Trading.

Wirecard claims that it is lending €370M via MCA. This number has fallen, since the previously stated €400M. They’ve also changed their statements regarding where this money is being lent, telling investors at the H1 results call that it’s now less than 1/3 in Brazil and Turkey. According to their CPO, it’s not in Europe. There aren’t a lot of places left it could be, and Wirecard refuses to disclose to investors where it is (contrary to Markus Braun’s statements re transparency).


oCap Management Pte Annual report

Third party loan of $131M, denominated in Euros. The report states the loan bears an interest rate of 3.8% - 6% charged. Annual interest accrued of $663k shows the loan is between 30-49 days old at the balance sheet date.

In September 2018, had no mention of MCA on their website, instead mentioning online etrade finance and blockchain technology (Source).

Carlos Haeuser is the CEO of oCap, and was appointed a director on the 5th of March 2018 (Source).

On the 15th of March 2018 Carlos resigned as the Chairman of the board and MD of Wirecard Turkey (replaced as Chairman by Wirecard COO Jan Marsalek) (Source).

On the 22nd of March 2018, Carlos was removed as CEO of Wirecard Technolgoies Gmbh (Source).

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