German Payments Group Wirecard Says $2.1 Billion of Cash is Missing (ft.com) 44
Wirecard was engulfed in a deepening crisis on Thursday after a warning from the German payments group that $2.1 billion of cash was missing [Editor's note: the link may be paywalled; alternative source] sent its shares crashing. From a report: The company was told by EY that there were indications a trustee of Wirecard bank accounts had attempted "to deceive the auditor" and that "spurious cash balances" might have been provided to EY by a third party. The disclosure left Wirecard unable to release its 2019 results as it had promised to do on Thursday and gives banks the option of terminating $2.2 billion of loans unless they are published by Friday June 19. In a statement Wirecard said it was "working intensively together with the auditor towards a clarification of the situation." The revelation caps a tumultuous period for Wirecard, a company long regarded as a great hope for Germany's tech sector but one that has spent the past 18 months battling to allay concerns over its accounting. Investors' enthusiasm for the company, whose aggressive expansion was masterminded by Markus Braun, its chief executive and largest shareholder, catapulted it into Germany's prestigious Dax 30 index two years ago with a market value of $27 billion. It slumped to less than $5.6 billion on Thursday as its shares plunged almost 70%
Look down the back of the sofa (Score:4, Funny)
That is where my missing cash usually ends up.
washing machine (Score:2)
I bet they had it on a SD card and washed it. hate when I do that.
May be paywalled? (Score:3)
[Editor's note: the link may be paywalled [...]]
Why use "may be" when you know for sure it is?
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That just means the editors can't be bothered to click the fucking link and see. Now as far as 2.1 billion missing that's a nice haul. Plenty of cash to throw around and buy a false identity in another country. I applaud whoever accomplished it.
Re:May be paywalled? (Score:5, Informative)
Because for some users the article may be available. For example, beyond subscription, the FT allows you to read the articles if you come into them via a Google search.
Example: Visit this search result [google.com] of TFA's headline, click through to the top FT link and you can see the article for free.
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Because for some users the article may be available
I know, but I would still call it a paywalled article. In other words, "paywalled" meaning "some users have to pay / not free for everyone", not meaning "all users have to pay".
click through to the top FT link and you can see the article for free
I tried, I can't. My ad blocker might be causing this, I don't know.
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Does he know for sure? I have a subscription to FT, unless I log out and check I wouldn't know for sure which articles you can read and which you can't.
Wow! (Score:2)
Does anybody know, is this the largest single theft in history? (*)
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* (not counting governments, like the Nazis looting the art treasures of Europe)
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Wow-- 2.1 Billion dollars?
Does anybody know, is this the largest single theft in history? (*)
--
* (not counting governments, like the Nazis looting the art treasures of Europe)
I believe the 1MDB scandal would still eclipse this. I think roughly $4.5 billion was stolen/embezzled in that incident, of which only a couple hundred million have been recovered so far.
Re:Wow! (Score:5, Interesting)
Most likely it never existed in the first place. It wasn't stolen.
Personal guess: Let's say Wirecard's revenue is a 3% fee on a transaction. To make their company look WAY bigger than it is they book to "accounts receivable" $103 for the whole transaction instead of the $3 that they collect in fees. At the same time they never book a liability of $100. They can't let "accounts receivable" grow to some stupidly large number, so they move the $103 to "cash" and never properly reconcile "cash" against their bank statements. The $103 shows up in cash, but it doesn't mean anything more than a bunch of random numbers summed in an Excel column.
100 dollars was passed through Wirecard's system from buyer to seller. Wirecard did collect $3 in fees from the seller. On this side, No money was stolen.
Investors read the false accounting statements, trusted them, and paid good money to buy the now greatly devalued stock. The seller of the stock may not have known about accounting fraud. The buyer of the stock got shafted.
Did Wirecard commit account fraud? Absolutely. Every business owner/CEO watches the bank accounts. It is impossible that the owner/CEO didn't see the huge difference between the financial statements and the actual bank balance at the end of each month/quarter. There are at least 5-30 other people who knew the actual bank balances and said nothing.
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Interestingly there's no Wikipedia page for the largest thefts in history.
I think that Sindona/Calvi/Gelli/Marcinkus Banco Ambrosiano flimflam in the 1970s might be among the largest though. The Vatican alone was on the hook for over a billion dollars, and other groups lost hundreds of millions. Enough money vanished into thin air that they apparently killed Pope John Paul I, two Italian prosecutors, at least one judge, bank regulators, and a couple of Italian police investigators to keep the gravy train
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Who said it was stolen? They forgot where they put it, that is all.
Re: Wow! (Score:3)
My guess is the theft of India by the East India Company would be near the top.
Cash ... but actually not cash? (Score:1)
Not reading the TFA or even TFSummary.
Anyone willing to bet "cash" here doesn't mean in any way "money in coins or notes" but just exactly the opposite? It's like having "literally" used to literally mean the opposite.
Re:Cash ... but actually not cash? (Score:5, Informative)
In the context of businesses, "cash" is frequently used as a synonym for "liquid assets" that can be accessed immediately. People talk about Apple having hundreds of billions of dollars "in cash", but Apple hasn't built a Scrooge McDuck style vault somewhere and filled it with bank notes.
Re:Cash ... but actually not cash? (Score:4, Funny)
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People talk about Apple having hundreds of billions of dollars "in cash", but Apple hasn't built a Scrooge McDuck style vault somewhere and filled it with bank notes.
Sure they did. It's in a bunker buried under the park inside the Spaceship.
EY (Score:4, Informative)
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There's nothing ironic about EY finding fraud. Just because the company had experienced their own in the past doesn't mean they aren't primarily an auditing company that works to find fraud elsewhere. The thing about fraud is it usually takes someone *external* to find it. Being an auditor doesn't make you immune.
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Auditing companies are not there to find fraud, they're there to confirm that the accounts are an accurate reflection of the business.
If someone is committing fraud, and doing it in a way where the accounts are still accurate, then the auditors (probably) will not find it. Nor will the auditors find issues where they're being actively lied to - for example if the fraudster fakes a bank statement showing a bank balance that matches the accounts.
One of t
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There's nothing ironic about EY finding fraud. Just because the company had experienced their own in the past doesn't mean they aren't primarily an auditing company that works to find fraud elsewhere. The thing about fraud is it usually takes someone *external* to find it. Being an auditor doesn't make you immune.
It's ironic because everyone knows EY commit fraud on behalf of their clients every day of the week. It's their main income source. Hiding the truth, shuffling paper around to make things that are not true appear to be true. It's just what they do; it's pretty well all they do because only people with a lot to hide can afford to hire EY. Honest people don't generally have that sort of cash.
Better have some popcorn (Score:2)
Imagine a pile of paper bills worth of $2.1b going up in flames ... If one ever wanted to sit back, eat popcorn and watch the world burn then this would be the opening scene.
They must be living in the Dark Ages equivalent of modern commerce if they cannot even get the accounting right. It's literally the single, one thing you expect them to get right and they'd pissed it away. Anyone who only came close to working with this company can forget to find a job in fiance again. You put that name on your CV and i
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Re:Better have some popcorn (Score:5, Interesting)
Or a trustee has been speculating with the funds they were entrusted with and got wiped out during the recent turmoil.
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That's a speculation in itself... It doesn't quite explain why they fail to release their 2019 numbers and why it started 18 months ago, where the first claims on their bad accounting started.
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Of course it must have gone somewhere obviously. They only don't know where it is or they are trying to hide it ...
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That would be a pile of bills 150 miles high, watch the world burn indeed.
Check ... (Score:2)
Russia, China or North Korea thank you (Score:2, Insightful)
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If western nations are going to outsource software to other nations, you need to be aware that Russia is a major Allie of India and North Korea is an allie of China. As such, these nations will leave back doors in software for others to take advantage of.
Of those, I think NK is the only one that pulls bank heists as a form of government revenue.
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Assuming it is REALY gone, then it was a theft, and it would be a state actor that would obtain that amount.
As to not outsourcing, wait....
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I cannot find anything in the article (or on the Internet) that this is a state actor job. Looks like a typical case of fishy financial accounts, just an exceptionally big one. That is OUR speciality. You really do not need to do that in Russia, India or China - you just purchase a politician to protect you.
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NONE.
THis was done by an outsider that would not be caught easily.
That's nothing compared to the missing Market Cap. (Score:2)
-All hail the paper tiger!
The (alternative source) Article has no details (Score:2)
This scandal has been cooking for a few weeks now. I was trying to find out what was going on, the story was that Wirecard only operate in a limited number of countries and they have partners elsewhere. The discrepancies were "elsewhere" but the board were claiming initially that this was just a technical issue and that the money would be transferred some time soon (paraphrasing A LOT from memory).
The situation was being investigated, as of yesterday the share price was still rising after an initial drop
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My corporate bonus card (as in when I get bonuses, it goes to the card) is a wirecard card.
Fortunately I only have $35 in there.
FWIW, the website is a basket case. They have the air of a scammy outfit.
Sorry (Score:2)
I accidentally your 2.1 billion dollars.
*Laughs in German* (Score:3)
"a company long regarded as a great hope for Germany's tech sector"
No.
Not even remotely.
You seem to confuse Germany with Vapor-con Valley.
Are you on drugs?
Invisibilia (Score:2)
Amazingly, a short-seller in the UK that does a tonne of research on the companies that he shorts, usually with the goal of taking down shady companies. He was the target of a multi-year, incredibly focused hacking campaign. People would follow him, show up at his house, release false (and damaging) info about him online. He received thousands of incredibly well-crafted and specifically targeted phishing emails in an attempt to get his credentials and further ruin him. He thought he was going insane and no