Top Wirecard shareholder calls on board to end ‘whitewash’

One of Wirecard’s largest shareholders has called on the company’s board to end a “whitewash” of its problems and appoint new managers “untainted” by the group’s past.

Andreas Mark, fund manager at Union Investment, a top-10 shareholder in Wirecard with a 4.1 per cent stake, told the Financial Times on Tuesday that “the time for excuses is over. The company tried to whitewash the problems for too long. Now deeds are more important than words.”

Wirecard shares have lost a third of their value in the last week, to €10.7bn, after KPMG said it could not verify whether large parts of the German group’s sales were real, and faced several obstacles to its six-month special audit.

Mr Mark said the company “needs an organisational and personal renewal. [Chairman Thomas] Eichelmann and the supervisory board need to appoint untainted, external managers to the executive board.”

Union is the second large German asset manager to break ranks with Wirecard. Last week, Frankfurt-based Deka Investment, called the company’s communication “a catastrophe” and urged another investigation that “digs deeper”.

Wirecard declined to comment on Mr Mark’s remarks.

The new calls for action came as Wirecard disclosed changes to the structure of its business on Tuesday.

The group said it would liquidate a Dubai subsidiary that is central to whistleblower allegations of accounting fraud, according to notices sent to lenders exposed to €1.8bn of debt issued by the German payments group.

KPMG’s report said the accounting firm could not verify sales reported for Dubai-based CardSystems and two other large subsidiaries between 2016 and 2018. 

In Tuesday’s notice to lenders, Wirecard said “the assets, business activities and operations of CardSystems” had been transferred to the group’s other Dubai unit, Wirecard Processing, which is also a guarantor of the group’s debt. It said the transfer and liquidation was “intended to reduce the complexity within the group and increase its efficiency”.

Neil Campling, analyst for Mirabaud Securities, said: “There is no efficiency from what we see. And no change . . . Yet more questions are raised about the opaque business structure, the subsidiaries, the mysteries in the Middle East and the company’s disclosure practices.”

Wirecard declined to comment. The company has said KPMG’s special audit did not reveal any wrongdoing.

CardSystems was a guarantor for debt including €900m of convertible Wirecard securities maturing in 2024, which traded at prices as low as 71 cents on the dollar on Tuesday. 

Additional reporting by Joe Rennison in London

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