Stock Prices For Financial Tech Company Wirecard Plunges Amidst New Fraud Allegations
Share prices for the Munich-based global internet technology company, Wirecard, dropped once again after new reports of alleged accounting fraud surfaced this week. According to the latest reports, senior executives of the financial services provider allegedly had in-depth knowledge of fraudulent activities that were happening within the company.
Following the news, stock prices plummeted once again, resulting in the German stock exchange-listed company losing more than a third of its value since January. Earlier in the week, stock prices for the company fell by much as 19.6 percent, before slightly recovering at 110.80 Euros by the end of the trading day last Friday. Prices continued to fall, with prices hovering around 105 Euros this week.
A report published by the Financial Times alleged that two senior executives working at the company's headquarters in Aschheim, Germany knew about the so-called "round-tripping" accounting fraud and money laundering schemes. The schemes involved the transfer of cash from their European offices to the company's Asian subsidiaries in order to fake the numbers on their books. The accounting fraud and money laundering schemes were reportedly initiated in the company's Asia-Pacific operations, particularly in its Singapore office.
The company currently supplies a wide range of products to multiple financial institutions and establishments around the world. Wirecard is mostly known for its electronic payment transaction solutions and its services that include the processing of physical and virtual cards. The company also owns Citi Prepaid Card Services and Wirecard North America, which provides payment solutions to the United States market. It also owns the Great Indian Retail Group, which operates solely in the Indian market. Wirecard also has a subsidiary in Brazil through MOIP, which it acquired in 2016.
In response to the recent allegations, a spokesperson from Wirecard released a statement denying that they were involved in any such accounting schemes. In an interview with AFP, a spokesperson insisted that the company "decisively rejects" all allegations and they are now preparing to take legal action against those that have caused them reputational harm.
State prosecutors in Germany currently do not have enough to go on to launch an investigation into Wirecard's operations. However, Bafin, a financial market watchdog, announced last week that it will be conducting its own probe into the company's market manipulation allegations. Wirecard has been one of the fastest growing financial services providers in the country. The company even displaced the country's financial giant Commerzbank from the DAX index. At its peak, Wirecard boasted a market valuation of around 23 billion Euros.