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Singapore police looking into reports of alleged financial irregularities at digital payments firm Wirecard

Singapore police on Monday said it was looking into reports by the Financial Times of alleged financial irregularities at German digital payments firm Wirecard AG.

[SINGAPORE]  Singapore police on Monday said it was looking into reports by the Financial Times of alleged financial irregularities at German digital payments firm Wirecard AG.

The FT last week published two reports about alleged wrongdoing at Wirecard’s Singapore office that sent shares in the member of the blue-chip DAX falling the most in more than a decade on Friday.

“The Police are looking into the matter,” a spokeswoman for the Singapore Police Force said in response to an emailed question from Reuters about the reports.

On Friday, the Financial Times reported that an external law firm commissioned by Wirecard found evidence indicating “serious offenses of forgery and/or of falsification of accounts.” Rajah & Tann LLP lawyers identified potential civil and criminal violations in Singapore, Hong Kong, India, Malaysia and Germany, findings that formed the basis of a presentation to Wirecard’s senior management on May 8 last year, the newspaper said, citing the law firm’s report.

Wirecard and its law firm said on Monday that they had found no conclusive evidence of criminal misconduct by any employee of the company.

The response lifted shares in the German payments firm by 15 per cent at the market open, partly reversing losses of 40 per cent last week that were triggered by the FT's allegations of forgery and falsification of accounts.

Wirecard’s plunge on Friday - the worst since July 2008 - capped a tumultuous three days that shaved about 7.2 billion euros (S$11.15 billion) off the company’s market value, despite repeated denials of wrongdoing.

Munich-based Wirecard had initially dismissed the two FT reports on Wednesday and Friday as "inaccurate, misleading and defamatory".

It issued a more detailed response on Monday, saying that a member of its Singapore team had in April 2018 raised concerns about the alleged actions of a finance team member there.

The company then started an investigation, which found no evidence to support the allegations. "Furthermore, there were indications that the allegations could be related to personal animosity between the employees involved," the company said.

Wirecard hired Rajah & Tann for a review which is about to be completed, but which has so far not found evidence of criminal misconduct, the electronic payments company said.

Rajah & Tann, in a statement, confirmed that it had sent a letter to Wirecard on Feb 3 which stated that its inquiry was ongoing. "To date we have made no conclusive findings of criminal misconduct on the part of any officer or employee of the company," said the letter, posted on Wirecard's website.

Wirecard earlier last week denied claims made in another FT story that alleged executive fraud originating at the Singapore office, fueling concerns about the fast-growing company’s business practices. The stock closed 13 per cent lower last Wednesday.

German financial regulator BaFin is looking into the allegations for signs of possible market manipulation. On Friday, BaFin spokeswoman Anja Schuchardt said the regulator is at the beginning of its investigation and will take the new report into account.

Founded in 1999, Wirecard initially provided financial services to online gambling and adult websites, barely surviving the dot-com bust. After a decade of growth, the company last year replaced Commerzbank AG in Germany’s benchmark DAX index.

It’s not the first time Wirecard has had to defend its reputation. The shares plunged after past claims were published about accounting irregularities in 2008 and fraud allegations in 2016. But analysts have stayed true to the company, with 79 per cent recommending investors buy the stock, according to data compiled by Bloomberg.