Update – June 2020 – further research suggests the cash transfer to New Zealand may not have been as large as €100M, but the 13x increase in sharecount remains a big red flag.

We attach our fifth letter to the Wirecard Supervisory Board, sent to board members via their counsel on the 13^th of December.

We highlight a filing by Wirecard NZ on the 10^th of December 2019 that suggests that Wirecard have moved ~€100M into Wirecard NZ, dramatically increasing their share count by >13x. The last published share capital was NZD13M, and their 2018 financial statements are late – a common theme for Wirecard in 2019. Reported 2017 revenues grew just 2% to NZD13.2M; we can see no clear need for the huge capital injection. Is this money destined for the Allscore acquisition in China?

The China acquisition looks very similar in nature to the well-publicized Indian transaction, given what we perceive as deeply implausible margins and valuation that do not compare to peers, an unknown private equity firm investor, and the same conflicted due-diligence team from Baker Tilly that performed the Indian transaction due-diligence.

Wirecard has a history of unusual transactions late in December close to the balance sheet date. At this point we believe it is incumbent on the board to protect shareholder assets, and prevent any more shareholder funds leaving the business. Given the multiple fraud allegations outstanding, any transactions of this size should in our view be signed off by all independent board members.