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Wirecard widens KPMG audit; expects to be cleared in Singapore police probe
[FRANKFURT] Wirecard said on Wednesday it had widened the scope of a KPMG audit to draw a line under allegations that it manipulated its accounts, adding that it expects to be cleared in a Singapore police investigation.
The German payments company last month brought in KPMG to investigate allegations by the Financial Times, which Wirecard denies, that its finance team sought to inflate reported sales and profits at its units in Ireland and Dubai.
"We can totally confirm today that all of these allegations are unfounded," Wirecard chief executive Markus Braun said.
"But still, to give an additional service to the market and to bring down all these allegations, we decided to include here a second review by KPMG," he added as the company reported a 43 per cent gain in quarterly profit.
Mr Braun told analysts on a conference call that KPMG's mandate would be expanded to cover separate claims that Wirecard had overstated cash advances to merchants, and in relation to its accounting for third-party acquiring.
KPMG is expected to complete its work before the end of the first quarter of 2020.
Munich-based Wirecard, founded in 1999 and last year elevated to Germany's blue-chip DAX index, has for years been a target for short sellers, who bet that a share price will fall.
It has sued the Financial Times, which has stood by coverage that began in January with a story alleging fraud and false accounting at Wirecard's Singapore office.
As much as US$10 billion was wiped off Wirecard's stock market value and police raided its offices in Singapore in the wake of the coverage.
Mr Braun said he expected the Singaporean investigation to confirm the findings of Wirecard's own law firm which said there was no evidence of material wrongdoing.
"We are very optimistic that in the next month, a couple of months, this can be resolved," said Mr Braun.
Wirecard confirmed its 2019 guidance and forecast core earnings before interest, taxation, depreciation and amortisation (Ebitda) in 2020 of one billion euros (S$1.51 billion) to 1.12 billion euros, implying growth of 34 per cent at the mid-point.
Last month Wirecard, which provides digital payments services to more than 300,000 merchants around the world, told investors it expected its revenues to grow sixfold by the middle of the next decade.
In pursuit of that goal, Wirecard is acquiring an 80 per cent stake in Beijing-based AllScore Payments Systems, establishing a direct presence in China for the first time.
It has an option to buy AllScore outright after two years for a maximum consideration of 109 million euros. China's Ebitda contribution is forecast to reach 50 million euros by 2022, a Wirecard presentation showed.