Wirecard vs Financial Times – The story, which lead to a special audit of Germany’s largest listed Fintech

Last updated on May 19th 2020

This is only a blog post, without video or audio files. We decided to post on special occasions or special topics of interest.


Wirecard is a fintech, which is a member of Germany’s most important blue-chip equity index the DAX 30. In 2018 they pushed out Commerzbank of the DAX and its founder has been a celebrity for some time for achieving this. The company has been confronted by several articles in the Financial Times where the FT accused them of improper behavior. This led to a special audit by KPMG. The release of the audit has been postponed two times and was released yesterday, April 28th 2020. This blog article shows the build-up to the special audit, as well as some of the reception of the audit in the press. We would assume there are more articles to come.


January 2019

The first article dates back to January 30th 2019, accusing one manager in Singapore of money laundry and forging contracts. This made the Wirecard shares dive 21%. Here is the article Executive at Wirecard suspected of using forged contracts

February 2019

February 2nd 2019: FT’s second article is based on a Rajah & Tann (a law firm in Singapore) report, which has been hired for a special audit of the Singapore office by Wirecard. They found indications of forgery and fake accounts the FT wrote. Here is the article Wirecard’s law firm found evidence of forgery and false accounts

February 7th 2019: FT has the third in its articles titled Wirecard: inside an accounting scandal, where the FT told the story of the head of Wirecard’s Asia-Pacific accounting and finance operations. The article stated he thought his employees how to cook books on a whiteboard to “convince regulators at the Hong Kong Monetary Authority to issue a licence so Wirecard could dole out prepaid bank cards in the Chinese territory.”

This article leads to a search of the Wirecard office in Singapore on the next day, February 8th 2019.

In February law firms in the US started looking into class-action lawsuits against Wirecard (e.g. here)

On February 18th German Finance Watchdog BaFin issued a short-selling ban for Wirecard shares until April 18th 2019.

March 2019

On March 14th 2019 German Handelsblatt (the largest German business newspaper) reported on issues of the India business of Wirecard. At the time of the article, the business in India was bought for 230 mn Euros (approx. 260 mn US$). At the time of the purchase, it was questioned as too expensive. Now in India another investigation was started against Wirecard employees for several issues, including forgery and money laundry. The company in India was purchased from a fund, based in Mauritius called Emerging Markets Investment Fund 1A. Until today it is unclear who is behind this legal entity. See more in the KPMG report.

March 21st 2019, Financial Times has another article concerning a 2 mn Euros transaction investigated by Singapore police titled Senior Wirecard executives approved transactions in fraud probe.

On March 26th FT reports on Wirecard, which has shared parts of the report by law firm Rajah & Tann Wirecard says some Singapore employees may face criminal liability. The bottom line taken from the German media was that there was individual misconduct, but no reason to restate accounts.

March 28th 2019 submits lawsuit against FT and FT reporter Dan McCrum at Munich district court. Here is an article by German Newspaper Süddetusche Zeitung, based in Munich.

The next day on March 29th Wirecard strikes back with another article by Dan McCrum titled Wirecard’s problem partners. In the article, they point out problems of partners in Asia, e.g. missing licenses to conduct payments (e.g. ConePay).

April 2019

On April 17th 2019 the BaFin sues several people, including the FT Journalist McCrum for suspicion of market manipulation. Here is a German article by business periodical Manager Magazin.

June 2019

On June 7th 2019 Financial Times reports Wirecard’s settlement with FTC

July 2019

On July 22nd 2019 Wirecard sends a letter to the FT to stop writing articles and investigate their own staff. The next day Handelsblatt reports that the FT hired an external law firm to investigate their own reporting.

October 2019

On October 15th FT (again Dan McCrum) has another report Wirecard’s suspect accounting practices revealed. This article states that senior members of Wirecard’s financial team cooperated “to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead EY, Wirecard’s tier-one auditor.”

On October 21st 2019 Wirecard hires KPMG for a special audit. This is the point where the current blog post originates.

December 2019

None the less Financial Times publishes another article on December 9th 2019, again by Mr. McCrum questioning their cash flows: “… Correspondence indicates Al Alam was associated with €334m held in “trustee accounts” as of that date. It is not clear if that particular sum was included in Wirecard’s calculation of cash reserves; …”



The widely expected audit report was made available on April 28th. It was not exactly a clean bill of health, for example, Reuter wrote:

“The main FT allegation where KPMG found fault was that Wirecard had booked half of its worldwide revenues and much of its profits from three obscure third-party acquiring partners.

KPMG said it was not able to conclude whether these revenues did or did not exist for the years 2016-18.”

The German Newspaper ZEIT reports that the publication of the 2019 balance will be postponed.

A more extensive overview can be found in the Finanz-Szene, which states for example:

  • Wirecard did not deliver all documents, some of them months too late
  • For the audit of transaction data of 2016 and 2017, assistance form TPA partners were required but failed to materialize.
  • Several documents have been obtained by KPMG only in copy, almost exclusively electronic copies, which could not be further verified
  • Third-party business: KPMG did not receive sufficient documents to make a forensic investigation in the transactions 2016-2018.
  • Escrow accounts worth 1 bn Euros had not “sufficiently proven” payments-in

One could argue the KPMG auditors have found more questions than answers.


Update May 12th, 2020

As of today, the German news tv channel ntv reports that the founder is fighting for his life’s work: ntv reports that the trust in the company has been lost and that Markus Braun (billionaire founder) is fighting for all his accomplishments. They made significant changes to the board structure, including a new post for compliance, but large investors like Deka (one of Germany’s largest mutual fund company) have lost trust in the company the tv station reports and quotes Deka’s head of corporate governance. Such a public comment is quite unusual for Germany.

Another lawsuit in relation to Wirecard seems to come to a close. The London-based short-seller Fraser Perring – will get a financial penalty and drop proceedings for suspected manipulation of Wirecard shares reports Reuters: Munich court to drop case against British short seller over Wirecard shares


Update May 15th, 2020

One of the business partners of Wirecard, Al Alam Solution Provider FZ, based in Dubai went into liquidation.  This sent the share price down, reports Reuters  https://buff.ly/2zaxTd7


Further reading

The day after the release of the report and everyone could digest what was in there the share price took a dive of 26% (Article)

Here is a complete overview of FT’s coverage of Wirecard: https://www.ft.com/stream/ffd38f36-a94c-43f7-8a62-2f45caf1bea3

Here is a complete Google Translate of the KPMG report: https://de.scribd.com/document/458744141/KPMG-Special-Audit-on-Wirecard and here the original as PDF in German: https://www.wirecard.com/uploads/Bericht_Sonderpruefung_KPMG.pdf