How could Wirecard possibly invent billions in profits and falsify the balance sheets? Did the regulators fail? There have been reports of manipulations at the DAX company for years
The British “Financial Times” (FT) has long had its own dossier on its website. Under “Inside Wirecard” the years of research of their reporters are listed who told repeatedly about evidence of trickery, opaque financial flows and possible accounting fraud since 2015.
Wirecard called this “false and misleading claims” or “inaccurate, misleading and defamatory” according to media reports. Auditors and financial regulators apparently haven’t looked closely for years on the contrary, they took action against FT journalists instead.
The regulatory authority BaFin filed criminal charges against two FT reporters and several exchange traders in April last year. Reason: With the disclosure stories, they would have triggered a price slide at Wirecard, in order to then be able to enrich themselves with the help of brokers by betting on falling prices. The prosecutor launched an investigation into market manipulation and Wirecard was able to stage itself again as the victim of a conspiracy.
Dubious Events in the Philippines
Only a few days ago , the alleged dizziness was exposed. The Wirecard board of directors conceded that an alleged trust account balance at two Philippine banks of more than 1.9 billion euros probably does not exist. The board of the Philippine BDO Unibank had previously informed the auditors Ernst & Young (EY) that the certificate was obviously falsified.
Regardless of the question of why a DAX company could store a quarter of its total assets in the Philippines, the events and the people involved appear extremely dubious. First, a company called Citadelle Corporate Services is said to have managed the alleged Wirecard assets there. But the contract was terminated in late 2019. It is not known why but the managing director is in hiding, reporters from the “Wirtschaftswoche” tried unsuccessfully to track him down for weeks.
Wirecard trustee with a dubious past
Then the Filipino lawyer Mark Tolentino appeared as a trustee. He used to work in the Ministry of Transport and was released two years ago by President Rodrigo Duterte on personal orders for alleged irregularities. Even Tolentino, who answered legal questions from his more than 100,000 subscribers and followers in videos on Facebook and YouTube just a few days ago, has been unreachable since the Wirecard scandal.
It is also extremely opaque how Wirecard would like to have made profits in recent years. Basically, the company earns from processing cashless payments. They receive a commission for forwarding money from the end customer to the provider. The customers who use Wirecard’s services are not only many retailers, but also groups such as ALDI, BASF and Ikea.
The entire Wirecard profit comes from only three partners
As research by the “Financial Times” showed last year, almost the entire alleged Wirecard profit comes from the business with three partners: a company called Al Alam from Dubai, Pay Easy Solutions from Manila and Senjo in Singapore.
Al Alam, which is said to have provided more than half of the profit, was surprisingly dissolved in May but Wirecard is silent about who ran the company and why they should have brought in so much money.
It was a scam from Day 1
The address of a bus company
According to FT, Pay Easy Solutions is registered at the same address as a bus company called Fröhlich Tours – Christopher Bauer, a former German board member of Wirecard Asia Pacific, is the managing director of both companies.
At Senjo in Singapore, Rajaratnam Shanmugaratnam worked for a year as a director after “Wirtschaftswoche” research and is still managed as “Secretary” at a Senjo subsidiary – which is piquant because Shanmugaratnam is also the managing director of Citadelle and the former Filipino Wirecard trustee is registered.
His name has been reported to appear over and over again in connection with dubious Wirecard transactions for years, for the first time in court documents relating to a Wirecard deals from 2015.
Wirecard provided supervision for years
Wirecard has been suspected of falsifying the balance sheets for at least five years. However, the EY auditors and the BaFin financial regulator let them do it. BaFin boss Felix Hufeld now speaks of a “complete disaster” and is self-critical: “We have not been effective enough to prevent this from happening,” he said on Tuesday. His authority told German media : “Once the facts have been finally clarified, BaFin, along with other private and public bodies, must ask how its supervisory measures could have been made more effective.”
BaFin refers to its responsibilities and competencies. It only oversees Wirecard Bank, not the entire group. Therefore, they have “no formal examination rights with regard to the dubious Asian business of the group”. Due to the strong growth and changing legal requirements, the federal authority now wants to review “how Wirecard AG as a group can be effectively supervised”.
In 2019, BaFin still protected Wirecard
In doing so, BaFin can crack down hard. In spring 2019, the “Financial Times” reported inconsistencies in Wirecard’s Asian business. Employees have forged contracts, backdated or even invented them freely. When the Wirecard share price tumbled, BaFin used one of its sharpest means: In close coordination with the European securities regulator ESMA, it had a Europe-wide short sale ban. This had only happened in the financial crisis after the bankruptcy of the US bank Lehman Brothers in 2008.
The trigger for the ban was a call to the public prosecutor’s office in Munich, Wirecard would be blackmailed. The call came from “Wirecard’s legal representative”, as the public prosecutor confirmed to German media . “A file note was made about this conversation, which, as is customary in comparable cases, was also made available to BaFin. The BaFin was therefore also aware of who sent the notice.” The BaFin approach looked “as if a protective wall was being built around Wirecard,” wrote the “Süddeutsche Zeitung”.
Politics demands consequences for BaFin
The Bundestag Finance Committee wants to deal with the role of financial supervision before the summer break. “If the BaFin president already speaks of a scandal, this must also have consequences for his authority,” said committee chair Katja Hessel (FDP) of the Funke media group. The Left Party went even further: “Personnel consequences at the top of BaFin must also be examined,” said Group Vice-President Fabio de Masi.
The retired Wirecard boss Markus Brown now has to answer allegations of accounting fraud and market manipulation. The five million euro bail for his release from pre-trial detention was no problem for him: he sold a large part of his Wirecard shares immediately before his resignation. In a series of sales on Thursday and Friday, he generated a total of 155 million euros, as Wirecard announced in several ad hoc notices on Tuesday evening.
Thai Parliament Opens Special Session Over Protest Tensions
Thailand’s Parliament began a special session Monday that was called to address tensions as pro-democracy protests draw students and other demonstrators into the streets almost daily demanding the prime minister's resignation.
As Speaker of the House Chuan Leekpai began the session, only 450 of the total of 731 members of both houses had signed in for the meeting.
The demonstrations by student-led groups in the Bangkok and other cities have three main demands: that Prime Minister Prayuth Chan-ocha step down, the constitution be amended to make it more democratic and reforms be made to the monarchy to make it more accountable.
Public criticism of the monarchy is unprecedented in a country where the royal institution has been considered sacrosanct, and royalists have denounced the protesters for raising the issue.
“The only way to a lasting solution for all sides that is fair for those on the streets as well as for the many millions who choose not to go on the streets is to discuss and resolve these differences through the parliamentary process,” Prayuth said last week.
The non-voting session of Parliament is expected to last two days.
The protesters have little confidence in the parliamentary path, declaring the government’s efforts insincere.
They noted the points of discussion submitted by Prayuth’s government for debate dealt not with the protesters' concerns but were thinly disguised criticisms of the protests themselves.
They concern instead the risk of the coronavirus spreading at rallies, the alleged interference with a royal motorcade by a small crowd earlier this month, and illegal gatherings and the destruction of images of the royal family.
The protesters allege Prayuth, who led a coup in 2014 as the army chief, was returned to power unfairly in last year’s election because laws had been changed to favor a pro-military party. The protesters also say the constitution, written and enacted under military rule, is undemocratic.
Parliament in September was scheduled to vote on six proposed constitutional amendments but instead set up a committee to further consider such proposals, and then recessed.
Constitutional changes require a joint vote of the House and the Senate, but the proposals lack support in the Senate, whose members are not elected and are generally very conservative and hostile to the protesters.
Instead of confronting lawmakers and counter-protesters on Monday, the pro-democracy protest organizers have called for an afternoon march to the German Embassy, apparently to bring attention to the time King Maha Vajiralongkorn spends in Germany.
Germany's foreign minister, questioned in Parliament by a member of the Green Party, recently expressed concern over any political activities the king might be conducting on the country's soil.
Protesters’ criticism of the royal institution has roiled conservative Thais. Self-proclaimed “defenders of the monarchy” mobilized last week online and in rallies in several cities, in many cases led by local civil servants.
A small group of royalist demonstrators were outside Parliament on Monday morning, saying they were there to let lawmakers know of their opposition to any changes in the status of the monarchy.
Typhoon Displaces Thousands, Floods Villages in Philippines
A fast-moving typhoon forced thousands of villagers to flee to safety in provinces south of the Philippine capital Monday, flooding rural villages and ripping off roofs, officials said.
There were no immediate reports of casualties from Typhoon Molave, but authorities reported at least one person was missing and seven others were rescued after their yacht sank off Batangas province south of Manila.
The typhoon has sustained winds of 125 kilometers (77 miles) per hour and gusts of up to 180 kph (112 miles) per hour and was blowing westward at 25 kph (15 mph). Molave is expected to start blowing out of the country into the South China Sea on Monday, government forecasters said.
At least 25,000 villagers were displaced with about 20,000 taking shelter in schools and government buildings which were turned into evacuation centers, according to the Office of Civil Defense.
“Villagers are now asking to be rescued because of the sudden wind which blew away roofs,” Humerlito Dolor, governor of Oriental Mindoro province, told DZMM radio.
Dolor said pounding rains overnight swamped farming villages in his province then fierce winds toppled trees and power posts early on Monday, knocking off power. Authorities were clearing roads of fallen trees and debris in some towns after the typhoon passed, he said.
More than 1,800 cargo truck drivers, workers and passengers were stranded in ports after the coast guard barred ships and ferry boats from venturing into rough seas.
About 20 typhoons and storms annually batter the Philippines, and the Southeast Asian archipelago is seismically active, with earthquakes and volcanic eruptions, making it one of the world’s most disaster-prone countries.
Australian Anguish at Passenger Strip Searches in Qatar
The Australian Broadcasting Corporation reports Australia has formally complained about what it is calling the "offensive and grossly inappropriate" treatment of passengers at Doha airport in Qatar. The report says thirteen Australian women were taken off a flight to Sydney after a newborn baby was found in an airport bathroom and the travelers were forced to have invasive internal examinations.
Airport authorities say when a premature baby was discovered in a bathroom at the Hamad International Airport in Doha, Qatar, on October 2, all female passengers onboard a flight preparing to fly to Sydney were taken off the aircraft. The group included 13 Australian women.
They were taken to two ambulances waiting outside the airport and subjected to strip searches. Some of the women have told local media they were terrified and were not told why the examinations were being carried out.
The Australian Federal Police have been informed, although it is unclear what powers investigators might have over an incident that occurred in the Middle East.
Australian foreign minister Marise Payne says Australia has formally complained to Qatar.
“We also understand the matter has been reported to the Australian Federal Police. This is a grossly, grossly disturbing, offensive, concerning set of events. It is not something I have ever heard of occurring in my life in any context. We have made our views very clear to the Qatari authorities on this matter,” Payne said.
Media reports have said the Australian women could take legal action against authorities in Qatar.
Australian Labor opposition leader Anthony Albanese says their treatment has been unbelievable.
“Reports of this treatment are really disturbing. The idea that women could be subject to these very intrusive searches is in my view an absolute disgrace," Albanese said.
In a statement, airport officials in Doha said the baby was “safe” and being cared for in Qatar.
They added that medical staff had expressed concern to them “about the health and welfare of a mother who had just given birth and requested she be located prior to departing.”
Australian authorities have said they are expecting a report on the incident from the Qatari Government later this week.
Malaysia’s King Rejects PM’s Request to Declare State of Emergency
Malaysia’s King Al-Sultan Abdullah has rejected Prime Minister Muhyiddin Yassin’s request to declare a state of emergency due to the...
European Markets Nosedive Monday as Global Coronavirus Cases Rise
European markets were falling Monday as investors appeared increasingly uncertain about the outlook of the global economy due to a...
Australia’s Second-Largest City to Begin Emerging from Strict COVID-19 Lockdown
After more than three months under stifling restrictions imposed in response to a second wave of COVID-19 cases, life in...
Nigerian Citizens Justify Massive Looting of COVID-19 Supplies
Amid tensions in Nigeria last week over police brutality, mobs of citizens are overrunning several government-owned facilities and ransacking palliatives...
Biden Claims, Trump Denies He’s ‘Waved White Flag’ on Coronavirus
Democratic Party challenger Joe Biden is accusing the incumbent president of giving up the fight against the coronavirus, while President Donald...
WHO Director-General Warns Against Politicization of COVID-19 Pandemic
The World Health Organization Monday once again warned nations against “the politicization” of the COVID-19 pandemic, saying it has led...
Two Drugmakers Resume US Tests of COVID-19 Vaccines
Two drugmakers announced Friday the resumption of U.S. testing of their COVID-19 vaccine candidates. Testing of AstraZeneca's vaccine candidate had...
US Sets New Daily Record for Coronavirus Infections
The United States has set a daily record for coronavirus cases as a new surge of the virus raises fears...
Where Trump, Biden Differ on COVID as Cases Resurge
As the United States saw its highest number of new coronavirus cases reported in a single day, former Vice President...
Uganda Cuts Cost of COVID Test From $65 to $50
Uganda has reduced the cost of a COVID-19 test from $65 to $50, a move welcomed by truck drivers in...
Top Aide to US Vice President Pence Tests Positive for Coronavirus
A close aide to U.S. Vice President Mike Pence has tested positive for COVID-19, a spokesperson for the office said...
Colombia Surpasses 1 Million Coronavirus Cases
Colombia surpassed 1 million confirmed coronavirus cases Sunday, according to data compiled by the Johns Hopkins University Coronavirus Resource Center ....
Italy Further Tightens Closures as Coronavirus Infections Surge
With the number of daily new infections from the coronavirus now close to 20,000, Prime Minister Giuseppe Conte on Sunday...
New Lockdowns in Europe Amid Coronavirus Resurgence
Spain has declared a state of emergency and enacted a new round of lockdowns countrywide as it battles a resurgence...
Australia Wants Citizens Stranded Overseas by COVID-19 Restrictions Home by Christmas
Australia is to allow more of its citizens stranded overseas by COVID-19 restrictions to return home. A weekly quota imposed...
White House: US ‘Not Going to Control the Pandemic’
With the coronavirus surging in the United States again, White House chief of staff Mark Meadows declared Sunday that the...
Who’s In Line for COVID-19 Vaccines?
The COVID-19 vaccines are coming. The question is, who gets them first? And who is next in line? Two companies...
COVID-19 ‘Right Under Control’ in Australia, Experts Say
As Australia’s most populous state eases more COVID-19 restrictions, experts say the nation has brought the epidemic “right under control.”...