Update: June 2020
EY announced €1.9bn of cash missing, CEO arrested, Wirecard AG filed for insolvency
January 6, 2020
|Subsidiary||Date||Capital increase (EUR)|
|Wirecard NZ Limited||10/12/2019||105,890,145|
|Wirecard Australia A&I PTY LTD||19/12/2019||6,912,525|
|Wirecard Hong Kong Limited||23/12/2019||5,160,220|
|Wirecard Payment Solutions Hong Kong Limited||23/12/2019||13,768,300|
|Wirecard Asia Pacific Holding||26/12/2019||73,285,614|
Sources: New Zealand Companies Registry, ASIC Register, Hong Kong Companies Registry, ACRA. Links to all below.
Why this money has been moved should be of concern to all stakeholders. Wirecard reported EBITDA of €280M in the APAC region for the first nine months of 2019. No acquisitions have closed in 2019, and total group capex has been just €75M. On this basis, we believe there should be substantial cash balances building up in the APAC region which would, in turn, have eliminated the need for such substantial capitalization from Germany. Why do they need this so close to year end? We recently highlighted Wirecard’s history of peculiar December transactions close to the audited balance sheet date.
These capital injections include >€110M into Singapore, where the CAD investigation continues, and where auditors recently disclaimed their opinion on Wirecard accounting.
We urge analysts to ask Wirecard for an explanation.
We have previously written about several strangely circular transactions that Wirecard is involved with:
We have heard from multiple local sources that Wirecard’s integration of the Citi APAC portfolios has been very challenging and costly. The original deal, announced in March 2017 included a December 31st 2019 cut-off date for accessing Citi systems. Our research shows that few, if any, of the acquired portfolios have so far transitioned from Citi to Wirecard systems due to technical and regulatory challenges. As a result, this money may be needed to post as collateral to continue operating on Citi’s platform.
|Wirecard Brazil (€M)||Our|
|Company Reported MCA||400||400|
|Brazil % Estimate||40%|
|Brazil MCA Estimate||160||160|
|Monthly Credit Volume||37.2||37.2|
|Calculated MCA Balance||18.6||18.6|