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Wirecard’s Merchant Cash Advance Scam in Brazil & Turkey

In November 2018 Wirecard claimed it had launched a new Merchant Cash Advance (MCA) Product and in both May and June 2019, Wirecard told analysts that at least 33% (€133M) was in Turkey and Brazil. Earlier statements in March, and May, have repeatedly said that the bulk of the programme is in Brazil, with some also in Asia and Europe. In August 2019, Wirecard mis-remembered their earlier statements, and told analysts that they had previously stated MCA was less than 33% in Brazil and Turkey. Overall lending shrank to €370M.

We have seen Wirecard’s own accounts for both Brazil and Turkey. In both countries, MCA lending would appear negligible or non-existent. And in Turkey, it’s illegal, suggesting if there is any MCA lending, this is a separate problem in itself. More details for both Brazil and Turkey are available. But at its simplest, any firm with a meaningful MCA programme would see this reflected on the balance sheet as significantly more receivables than payables at any given moment and neither Brazil nor Turkey have anything like this.

As of 31 December 2019, the outstanding balance in the Wirecard Brazil FIDC (Wirecard’s regulated receivables fund) was R$32.3M. This translates to about €7.2M. In fact, this number has been fairly consistent for months. In 2018, when Wirecard first claimed to be pre-funding receivables in Brazil, this facility had not been set up. It does now exist, but lending volumes are very small.

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The lies keep piling up. There’s no meaningful MCA lending in Turkey, and what there is, is illegal. Similarly, there’s close to zero in Brazil. So where is this €133 million? Are they lying about it to mask a lack of cash flow?

Wirecard claims that at least 1/3 of its supposed €400M MCA program comes from Brazil and Turkey, with Brazil being the larger. Nonetheless, Wirecard is claiming that there is at least some meaningful lending, and subsequent revenue, from this business in Turkey.

WRONG!

Wirecard Turkey’s own audited (by Deloitte) financials shows that the MCA business there is tiny. As notable, in the entire report, there is not a single mention of MCA.

Illegal Lending in Turkey?

As it turns out, MCA lending is illegal in Turkey. View legal opinion showing wirecard’s mca product is illegal in Turkey.

Our work on the ground in Turkey suggests Wirecard are offering some small volumes of MCA to wireless carriers and mobile app vendors. The lack of disclosure in this audited report suggests they are misleading both Deloitte and the Turkish Banking Regulator (BRSA). Revenues and TPV in 2018 were only €2.4m / €61m which shows the business can only support tiny volumes of MCA – but this is not disclosed in the annual report.

We have informed the banking regulator in Turkey (BRSA) and we believe they will be looking into this imminently.

KPMG and the Supervisory Board

We have written several letters to the Wirecard Supervisory board highlighting our concerns and have called for the management board to be suspended to protect shareholder assets. Wirecard’s own filings confirm that management’s statements in 2018 and throughout 2019 about MCA were, and remain, false. KPMG and the Supervisory Board will easily see that in the accounts. But we reiterate our earlier question, “why are they misleading investors about MCA lending?” Our answer to this remains consistent: to hide something.

We believe Wirecard management are concealing a substantial overstatement of profits at CardSystems Middle East, Wirecard’s un-audited Dubai subsidiary, whose client transactions bear hallmarks of being fake/fraudulent. These dubious “clients” have contributed 58% of Wirecard AG profits in 2018.

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US Designates 6 More China-based Propaganda Outlets as Foreign Missions

The United States has designated six additional China-based propaganda outlets as foreign missions, the newest push to counter communist propaganda.

The State Department issued a new determination on Wednesday that designates the U.S. operations of Yicai lobal, Jiefang Daily, Xinmin Evening News, Social Sciences in China Press, Beijing Review, and Economic Daily as foreign missions.

“They are all substantially owned or effectively controlled by a foreign government. We’re not placing any restrictions on what these outlets can publish in the United States," U.S. Secretary of State Mike Pompeo told reporters during a news conference. "We simply want to ensure that American people, consumers of information, can differentiate between news written by a free press and propaganda distributed by the Chinese Communist Party itself.”

The latest determination follows the State Department’s actions on Feb. 18 and June 22, for a total of 15 Chinese outlets designated as foreign missions this year.

Wednesday's announcement is the latest U.S. step to curb Chinese activity in the United States in the run-up to the Nov. 3 presidential election, in which President Donald Trump has made a tough approach to China a key foreign policy theme.

The State Department has previously required Chinese media outlets to register as foreign missions and announced in March it was cutting the number of journalists allowed to work at U.S. offices of major Chinese media outlets to 100 from 160.

In response, China expelled about a dozen American correspondents with The New York Times, News Corp’s Wall Street Journal and The Washington Post. Beijing also demanded that the Voice of America and Time magazine provide the Chinese government with detailed information about their operations.

Some information from Reuters.

Original Article from Isaan.Live

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Thai Prime Minister Lifts Week-Old State of Emergency

Thai Prime Minister Prayuth Chan-o-cha has lifted a state of emergency he imposed one week ago but which failed to bring an end to months of protests seeking his ouster and reforms of the country’s constitutional monarchy.
The government announced the end of the emergency decree in a written statement Thursday, saying the situation had eased to the point where “government officials and state agencies can enforce the regular laws.”
Prayuth issued the state of emergency last week after tens of thousands of protesters marched on his office at Government House in Bangkok and vowed not to leave until he agreed to step down.
Despite the ban on public gatherings of more than four people issued in the decree, mass demonstrations continued in the Thai capital, prompting Prayuth to announce on national television Wednesday that he was planning to lift the state of emergency.
However, the protesters have promised to resume the demonstrations if he did not resign by Saturday.
Prayuth is a former army general who seized power in a 2014 coup that ousted the elected civilian government. He won election to the post last year, but protesters say the vote was rigged in his favor due to laws drafted by the military.
In addition to changes to the constitution, demonstrators are also seeking to reduce the influence of the Thai monarchy. The institution maintains a divine-like status among Thailand’s elite, and is protected by strict “lese majeste” laws that allow for imprisonment of anyone convicted of insulting the monarchy.
Earlier Wednesday, Thai courts reversed a decision to shut down Voice TV — a media outlet partly owned by the family of exiled former Prime Minister Thaksin Shinawatra. Voice TV is one of four media outlets under investigation by the government for their coverage of the protest movement.

Original Article from Isaan.Live

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New Huawei Phone Comes at Crucial Time for Chinese Company

Huawei's new smartphone has an upgraded camera, its latest advanced chipset and a better battery. What it may not have outside the Chinese tech giant's home market is very many buyers.
Huawei, which recently became the world's No. 1 smartphone maker, on Thursday unveiled its Mate 40 line of premium phones, a product release that comes at a crucial moment for the company as it runs out of room to maneuver around U.S. sanctions squeezing its ability to source components and software.
The Mate 40 could be the last one powered by the company's homegrown Kirin chipsets because of U.S. restrictions in May barring non-American companies from using U.S. technology in manufacturing without a license.
Analysts say the company had been stockpiling chips before the ban but its supply won't last forever.
"This is a major challenge to Huawei and it's really losing its market outside of China," said Mo Jia, an analyst at independent research firm Canalys. The latest U.S. restrictions mean it "100% has closed doors for Huawei to secure its future components."
Executives said this summer that production of Kirin chips would end in mid-September because they're made by contractors that need U.S. manufacturing technology. In a press preview this week ahead of the Mate 40's launch, staff declined to answer questions on Huawei's ability to source chips. The head of Huawei's consumer business, Richard Yu, referred only briefly to the issue at the end of a virtual launch event Thursday.
"For Huawei, nowadays we are in a very difficult time. We are suffering from the U.S.
government's third round ban. It's an unfair ban. It makes (the situation) extremely difficult," Yu said.
Huawei, which is also a major supplier of wireless network gear, is facing pressure in a wider global battle waged between the U.S. and China over trade and technological supremacy. The U.S. government's efforts to lobby allies in Europe to not give it a role in new high-speed 5G wireless networks over cybersecurity concerns has been paying off, with countries including Sweden and Britain blocking its gear.
Huawei phones are not widely available in the U.S., but they're sold in Europe, the Middle East and Asia. The company climbed to the top of the global smartphone rankings this summer, knocking Samsung off top spot by shipping 55.8 million devices in the second quarter to gain a 20% share of the market, according to research firms Canalys and International Data Corp. But the performance was driven by strong growth in China while smartphone sales in the rest of the world tumbled due to the coronavirus pandemic.
Analysts say it will be hard for Huawei to remain No. 1.
"Huawei's in a tight spot," said Ben Wood, chief of research at CCS Insight. Along with the U.S. sanctions, it's also hurt by slumping confidence in the brand that makes retailers less keen to stock its phones. "And sadly, I don't think you're going to see the Mate 40 performing particularly well outside of China."
Huawei has a small but enthusiastic fan base in Europe, its biggest market outside China. But some users are turned off by the idea of sticking with the brand because of a related problem: recent models like the Mate 40, priced at 899 euros ($1,070) and up, can't run Google's full Android operating system because of an earlier round of U.S. sanctions.
Instead, they come with a stripped down open source version of Android, which doesn't have Google's Play Store and can't run popular apps like Chrome, YouTube and Search.
Mark Osten, a 29-year-old architect in Preston, England, bought a Huawei P30 last year when the contract on his previous Samsung phone ended.
He says the camera is great but hesitates to recommend the brand to others because of the uncertainty.
"I just can't imagine life without YouTube or Google," said Osten.
To make up for losing Google services, Huawei has built its own app store and has been paying developers to create apps for it. Users can request apps that aren't yet available, but it's not something that appeals to Chloe Hetelle, a 35-year-old events organizer in Toulouse, France, who bought a Huawei P20 model two years ago after switching from an iPhone.
"I don't want to request apps, I just want to have YouTube," said Hetelle. "I'm not really keen on struggling to get something that I would have easily with another phone."

Original Article from Isaan.Live

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