Singapore has told Wirecard AG to ensure that it keeps customer funds from its payments processing business in the city-state in local banks, the financial regulator said.
Wirecard’s primary business activities in Singapore are to process payments for merchants and help companies issue prepaid cards, the Monetary Authority of Singapore (MAS) yesterday said in an e-mailed reply to questions.
“MAS has required Wirecard to ensure that they keep customer funds arising from these activities in banks in Singapore,” a MAS spokesperson said in the e-mail.
Shares in the German firm have collapsed in the past few days amid an accounting scandal and worries about Wirecard’s credit facilities.
Germany’s top financial regulator called the scandal ensnaring Wirecard a “complete disaster” after the firm on Monday withdrew recent financial results and said 1.9 billion euros (US$2.15 billion) of cash previously reported on its balance sheet probably does not exist.
Wirecard entities in Singapore are not regulated by the MAS, though the central bank has received a license application from Wirecard under the new Payments Services Act, the regulator said.
The act provides for a grace period for entities conducting regulated activities to apply for a license, the MAS said.
It might issue requirements to such entities during the grace period, it added.
Singapore is home to Wirecard’s Asia-Pacific headquarters and the company has been expanding aggressively in the region, which accounted for almost 45 percent of the group’s reported revenue in 2018, second only to Europe.
The company’s regional operations cover Australia, Hong Kong, India, Indonesia, Malaysia, Myanmar, New Zealand, the Philippines, Thailand and Vietnam, according to its Web site.
Meanwhile, Bank of China Ltd (中國銀行), China’s fourth-largest lender, might write off most of the 80 million euros (US$90.34 million) it is owed and not extend the credit line, according to people familiar with the matter.
The bank — one of a group of at least 15 commercial banks behind US$2 billion in financing to Wirecard — plans to engage an external legal team to look into how it can minimize losses, they said.
Negotiations between Wirecard and its creditors are ongoing and the Chinese lender has not made a final decision, the people said.
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