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Wirecard hires Alix Partners for forensic investigation
[FRANKFURT] German payments company Wirecard has hired Alix Partners for a forensic investigation of the accounting scandal that led to its collapse, people close to the matter said.
The blue-chip company filed for insolvency last month, owing creditors almost US$4 billion after disclosing a US$2.17 billion hole in its accounts that auditor EY said was the result of a sophisticated global fraud.
Alix Partners has been given the task of finding out which Wirecard employees, including executive and supervisory board members, knew what about potentially criminal incidents, the sources said.
Findings are expected to be valuable in any litigation against Wirecard managers and claims to their directors and officers liability (D&O) insurers.
The investigation is being carried out with the consent of the insolvency administrator for Wirecard, the sources added.
While the forensic investigation is at an early stage, the administrator is making headway with asset sales as he tries to recoup money owed to creditors of the payments company, the market capitalisation of which peaked at 24 billion euros (S$38.1 billion) in 2018.
About a dozen Wirecard subsidiaries, including those in Singapore, Indonesia, South Africa and Turkey, have now been put on the block, two people familiar with the matter said.
These operations could be sold for a total of 100 million euros, one of the sources said.
Separately, the administrator is looking for buyers for Wirecard's core European operation and its lending arm Wirecard Bank, the source said, adding that they could be worth as much as 200 million and 100 million euros respectively.
Wirecard Bank's book value stands at 160 million euros but is expected to sell at a significant discount.
Including Wirecard's US operations, the administrator could reap a total of up to 500 million euros from asset sales, the source said.
Several payments companies, private equity groups and banks are looking at the assets, several sources said.
In anticipation of a low recovery rate for their money, several banks that lent to wirecard have already sold their exposure at less than 20 per cent of its face value. A slice of 200 million euros in Wirecard loans was put up for sale late last week with pricing expected to be below 15 per cent of face value, people familiar with the matter had said.
Alix Partners declined to comment. Representatives of Wirecard and the administrator were not immediately available for comment.