Wirecard UK unlocks cash for customers

Marco Green
June 30, 2020

"Whether insolvency proceedings will be opened is still under review".

Wirecard collapsed on Thursday owing creditors nearly US$4 billion after disclosing a hole in its books that its auditor EY said was the result of a sophisticated global fraud. "The management board is of the opinion that continuation is in the best interests of the creditors". "With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present".

At 0820 GMT, Wirecard shares traded 170% higher at EUR3.45, although shares are down 97% in the year to date. Traders said the rise was driven by market talk about potential deal activity.

Consumers were locked out of their accounts from Friday, when the Financial Conduct Authority (FCA) banned Wirecard Card Services, from carrying on any regulated activities or disposing of any funds or assets.

The FCA told Wirecard to stop carrying out regulated activities in the United Kingdom, leaving thousands of United Kingdom customers with frozen accounts. "We have been working closely with Wirecard UK and other authorities over the last few days to ensure that the firm was able to meet certain conditions required to lift the restrictions we imposed on it" the FCA said in a statement. "However, we can not lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns for example that all clients' money is safe".

EY has told its partners how to prepare for hard conversations with clients about its audits of Wirecard, the German payments company that has filed for insolvency after admitting that €1.9bn of cash probably never existed.

Wirecard has lost about 90% of its value since news of the accounting scandal on June 18.

Wirecard's former CEO Markus Braun was detained last week on suspicion of falsifying accounts before being released on bail.

Other reports by Click Lancashire

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