First person in Singapore charged over Wirecard scandal

Singapore

IN THE first case before the Singapore courts associated with scandal-hit German payments company Wirecard, Singaporean R. Shanmugaratnam has been slapped with four charges of falsifying letters that stated bogus balances held in his company's accounts.

The 54-year-old was described by The Financial Times as having "controlled" Citadelle Corporate Services - one of two companies into which the Singapore authorities have launched a joint probe.

He is accused of falsifying four letters to Wirecard UK & Ireland Ltd, misrepresenting the balances held by Citadelle in an escrow account with amounts ranging between 30 million euros (S$48.8 million) and 178 million euros, said the charge sheets.

He allegedly faked three of these letters on March 29, 2016, and the fourth on March 21, 2017. In his first appearance in court on July 3, charges in relation to the fourth letter were brought against him. The charges linked to the earlier three letters were laid out when he appeared before the court a second time on July 9.

Citadelle reportedly handled money for Wirecard in a trustee capacity, although it was not licensed to do so in Singapore; neither was it under the supervision of the Monetary Authority of Singapore (MAS). The regulator has placed Citadelle on the Investor Alert List on its website.

Shanmugaratnam is now out on bail of S$150,000. His case has been adjourned to Aug 20.

If convicted, he could be jailed up to 10 years and/or fined, for each charge.

Once touted as Germany's fintech star, Wirecard collapsed into insolvency in June after its auditor EY refused to sign off on the 2019 accounts of the parent company, following months of investigation into 1.9 billion euros missing from its books. German prosecutors arrested three former top executives of the company on July 22 on allegations that they masterminded a scheme to fake the firm's accounts.

The Singapore police's Commercial Affairs Department and the MAS have launched a joint investigation into Citadelle and Senjo Group (including its units). The police have been running a criminal probe into Wirecard's Singapore operations since February 2019.

The Financial Times reported that Shanmugaratnam had also served as a director of the Senjo Group from its incorporation in September 2015 to November 2016.

The Business Times reported in July that Singapore merchants that use Wirecard here to process payments have been quickly switching to the beleaguered fintech's competitors, spooked by the downfall of the parent company.

Wirecard's market share here is likely sizeable, though its exact size is unknown.

Its portfolio was bought from Citigroup a few years ago, with Citi then a major player alongside the three local banks in processing payments for merchants.