Wirecard AG shares continued their free fall after the two Asian banks that were supposed to be holding 1.9 billion euros (US$2.13 billion) of missing cash denied any business relationship with the German payments company.
Wirecard now faces a potential cash crunch.
The company on Thursday warned that loans up to 2 billion euros could be terminated if its audited annual report was not published yesterday.
Photo: Reuters
Analysts at Morgan Stanley estimated that Wirecard has available cash of about 220 million euros, if it cannot locate the missing money.
BDO Unibank Inc, the Philippines’ largest bank by assets, and the Bank of the Philippine Islands (BPI) yesterday said in separate statements that Wirecard is not a client.
“It was a rogue employee who falsified documents and forged the signatures of our officers,” BDO Unibank CEO Nestor Tan said in a mobile phone message. “Wirecard is not even a depositor — we have no relationship with them.”
BPI said it continues to investigate the issue.
Wirecard shares plunged 24 percent at 9:11am in Frankfurt yesterday, taking the stock’s losses to 71 percent since Wednesday’s close.
The company that was worth 24.6 billion euros in September 2018 when it entered Germany’s DAX index is valued at about 3.4 billion euros.
The denials from BDO and BPI follow a Wirecard statement on Thursday, which claimed that auditor Ernst & Young could not confirm the location of the missing cash that was supposed to be held in Asian banks and reported that “spurious balance confirmations” had been provided.
BDO has reported the Wirecard issue to Bangko Sentral ng Pilipinas, the Philippines central bank, Tan said.
The crisis has engulfed Wirecard, which has suffered one of the worst stock slumps in the history of Germany’s benchmark index after warning that as much as 2 billion euros in loans could be called due if its audited annual report, delayed for the fourth time, was not published yesterday.
Wirecard spokespeople did not immediately return calls and e-mails for comment.
Wirecard CEO Markus Braun has painted the company as a potential victim.
Braun has been resisting calls to resign and aggressively defending the company against accusations of accounting fraud, led by a series of articles in the Financial Times.
“It cannot be ruled out that Wirecard has been the victim in a substantial case of fraud,” Braun said in a statement.
The company temporarily suspended outgoing chief operating officer Jan Marsalek, it said in a statement late on Thursday.
Marsalek — who has been suspended on a revocable basis until June 30 — had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but was not successful, a person familiar with the matter said.
It is unclear if the funds can be recovered, the person added.
“Given the magnitude of the cash balances in question, new creditor risks and severity of the share price drop, we believe these board changes are unlikely to be enough to restore market confidence in the near term,” Citigroup analyst Robert Lamb said in a note yesterday.
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