Wirecard puts off 2019 result announcement amid fraud suspicions

German payment company Wirecard had to postpone its 2019 results announcement on Thursday after its auditor said proof for deposits amounting to 1.9 billion euros (2.1 billion dollars) could not be found.

The company’s management said its auditor, Ernst & Young, had found indications that “incorrect balance confirmations” had been submitted to the auditor, either by a trustee or the banks managing the trustees’ accounts “for the purpose of deception.” The affected accounts equal about one-quarter of Wirecard’s total balance.

“All those involved are trying to clarify the situation as quickly as possible,” Wirecard chief Markus Braun said. The company also announced legal action against an unknown third party

Following the news, the group’s shares at times plunged by almost 70 per cent, to 35 euros a share, and was temporarily suspended from trading.

If the share price doesn’t make a sustained recovery, experts believe Wirecard may even be removed from the German DAX index in September.

The group is now also facing severe pressure from banks which could recall loans amounting to 2 billion euros if Wirecard doesn’t present an audited report by Friday.

Wirecard is a payment processor which provides technology for processing electronic payments, such as for credit cards and risk protection for payments.

Despite the coronavirus crisis, the business had continued to grow of late. Preliminary numbers eventually published on Thursday show that the company increased its transaction volume last year by 38.5 per cent, to 173 billion euros.

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