German payments firm Wirecard shares plunge as auditor finds US$2.1 billion missing
- Auditor EY says it could not find sufficient evidence for US$2.1 billion in cash balances on trust accounts
- EY’s refusal to sign off for the 2019 accounts provided confirmation of the failings highlighted in a probe by KPMG last month
German payments company Wirecard said that its auditor had refused to sign off on its 2019 accounts, sending its shares plunging 60 per cent lower on Thursday, as it warned the delay could mean billions in loans are called in as early as Friday.
Wirecard said that auditor EY had informed it that sufficient evidence could not be found for €1.9 billion (US$2.1 billion) in cash balances on trust accounts – or around a quarter of its balance sheet total.
There were indications, Wirecard added, that these balances were “spurious” and had been provided “in order to deceive the auditor”.
In-house auditor EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for 2019 provided dramatic confirmation of the failings highlighted in an external probe by KPMG last month.
“The Wirecard management board is working intensively together with the auditor towards a clarification of the situation,” Wirecard said in a statement.
Wirecard warned further that, if it cannot provide certified annual and consolidated statements by Friday, this would allow about €2 billion in loans to be terminated.
