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CAD probe into Wirecard ongoing; MAS, Acra assisting

Manila vows investigation after firm initially claimed it kept missing US$2.1b in Philippine banks

Manila

THE Singapore Police has been conducting a criminal probe into Wirecard's Singapore operations since February 2019, the Monetary Authority of Singapore said on Monday in response to queries.

It added that the investigations are extensive and ongoing, and it and the Accounting and Corporate Regulatory Authority (ACRA) are collaborating with the Commercial Affairs Department (CAD) to scrutinise other possible aspects of the case.

Wirecard's collapse last week and admission that US$2.1 billion of its cash probably did not exist came after auditor EY refused to sign off its accounts for 2019, adding that there were clear indications of an elaborate fraud involving multiple parties around the world.

MAS has been in touch with relevant financial institutions to determine if there had been any abuse of Singapore's financial system for illicit purposes. "We will take firm action if we find evidence of criminal behaviour or serious lapses in anti-money laundering controls," an MAS spokesperson said.

Due to the cross-border nature of some of the transactions, Singapore authorities have reached out to relevant foreign authorities for further information and also stand ready to assist investigations by foreign authorities where requested.

On Monday, Philippines' anti-money laundering agency said it would conduct a "swift and thorough" investigation into the scandal-hit German payments firm and that it has drawn up an initial list of people and entities of interest.

The South-east Asian country became involved after the German firm initially claimed it kept the US$2.1 billion in two Philippine banks.

Mel Georgie Racela, executive director of the Philippines' Anti-Money Laundering Council (AMLC), said entities of interest include three local firms - Centurion Online Payment International, PayEasy Solutions and ConePay International.

The Financial Times in March 2019 said the three firms were Wirecard partners. The Philippines central bank has said no money from Wirecard entered the country's financial system. The local lenders named by the German firm - the Bank of the Philippines Islands and Banco de Oro Unibank - have also said it was not a client.

Wirecard chief executive Markus Braun was arrested in Germany last week and has been released on bail. German media has reported that German prosecutors will also seek the arrest of Jan Marsalek, its former chief operating officer.

Wirecard's collapse has laid bare significant cracks in Germany's financial oversight.

Even with ample warning, German authorities failed to catch accounting issues at the digital payments company. Slow decision making, insufficient oversight and fragmented responsibilities created cracks that allowed Wirecard's problems to go undetected by officials.

Germany is one of relatively few countries to split accounting enforcement between a private-sector watchdog and its markets regulator, while the investigation of money laundering at non-financial companies is handled by regional authorities. With the fallout risking the country's reputation as a place to do business, the government is now pushing for reform.

The financial regulator, known as BaFin, has come under fire for being slow to respond to allegations and temporarily banning short-selling of Wirecard stock last year, an unprecedented step that appeared to back Wirecard. To consolidate financial enforcement, BaFin will be given the power to start investigations into company accounts, the Financial Times reported on Sunday. REUTERS, BLOOMBERG

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