Business Money is missing: German Wirecard owes creditors 4,000 million...

Money is missing: German Wirecard owes creditors 4,000 million dlr

File photo of the Wirecard logo. Aug 22, 2018. REUTERS / Wolfgang Rattay

BERLIN / MUNICH / FRANKFURT, Jun 25 (Reuters) – German payment operator Wirecard collapsed on Thursday when it reportedly owed creditors nearly $ 4 billion, revealing a gigantic hole in its books that has become the worst scandal in German accounting.

The company’s implosion came a week after audit firm EY refused to sign the 2019 financial report, forcing CEO Markus Braun to leave and prompting Wirecard to admit that $ 2.1 billion in cash in his books probably did not exist.

The German firm said in a short statement on Thursday that its new administration decided to file for insolvency in a Munich court “because of an inability to meet its payments and an excessive debt burden.” He indicated that he is also evaluating whether to file declarations of insolvency for its subsidiaries.

Wirecard became the first member of the prestigious Frankfurt Stock Exchange DAX to go bankrupt, less than two years after becoming one of the top 30 listed companies in Germany, with a market valuation of € 28 billion. Dollars.

His disappearance leaves creditors with little hope of recovering the 3.5 billion euros ($ 3.9 billion) owed them, a source close to the matter said. Of that amount, Wirecard has borrowed $ 1.75 billion from banks and $ 500 million from creditors.

“The money is not there,” said one of the bank executives. “We could recover a few euros in a few years but we are going to declare sinister on that debt,” he added.

The Wirecard bankruptcy, once one of Germany’s most respected tech companies, represents one of the worst corporate failures in the country.

Shares of the company were suspended from the DAX following Thursday’s announcement and fell 80% once trading was resumed. They have lost 97% since the EY auditor questioned public accounts last Thursday.

Additional reports by John O’Donnell and Hans Seidenstuecker; written by Douglas Busvine. Edited in Spanish by Marion Giraldo

Our Standards:The Thomson Reuters Principles

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