Wirecard's missing 1.9b euros did not enter Philippine system: central bank

Manila

NONE of the 1.9 billion euros (S$3 billion) missing from scandal-hit German payments firm Wirecard AG appears to have entered the Philippine financial system, the central bank said on Sunday.

Bangko Sentral ng Pilipinas governor Benjamin Diokno said in a statement that the South-east Asian country's biggest lenders, BDO Unibank and Bank of the Philippine Islands, suffered no losses, despite having been named in connection with the missing funds.

The chief executive of Wirecard, Markus Braun, who built the company into one of the hottest financial technology investments in Europe and a rare tech champion for Germany, quit on Friday as the company faces a cash crunch after saying it may have been the victim of fraud.

The search for the missing cash hit a dead end in the Philippines, but the two Philippine banks have said documents purporting to show Wirecard had deposited funds with them were false.

"The initial report is that no money entered the Philippines and that there is no loss to both banks," Mr Diokno said, though he added that the central bank was investigating.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

"The international financial scandal used the names of two of the country's biggest banks - BDO and BPI - in an attempt to cover the perpetrators' track," he said.

BDO and BPI have stated that Wirecard was not their client and that they had no business relationship with the German firm, Mr Diokno said.

BPI, however, told Reuters on Saturday that it had suspended an assistant manager whose signature appeared on one of the fraudulent documents. BDO told the central bank it appeared that one of its marketing officers had fabricated a bank certificate.

Mr Diokno reiterated that the Philippine banking system was in a strong position going into the coronavirus pandemic and well-capitalised.

Meanwhile Wirecard said it had hired US investment bank Houlihan Lokey to devise a new financing strategy after Moody's slashed the company's rating to junk over the disappearance of 1.9 billion euros.

The scandal-hit company is desperately seeking to reassure investors after its search for the missing cash hit a dead end in the Philippines, prompting ratings agencies to react.

"The downgrade of Wirecard's ratings and review for further downgrade reflect the accounting irregularities and related implications on the company's liquidity and financial profile following its failure to publish the already postponed audited consolidated accounts for 2019," Moody's said late on Friday.

The company's auditors refused to sign off on its 2019 earnings report, a step that could trigger high and immediate refinancing needs, according to analysts who cover the firm.

Analysts said banks could move to call in some two billion euros in loans granted to the firm. "The deadline for audited results was June 19, otherwise two billion euros of loans could be terminated," said Neil Campling, an analyst at the Geneva-based Mirabaud asset-management company.

Wirecard shares closed down 35 per cent on Friday after the firm said it could not issue audited financial results. REUTERS