Wirecard says that the independent audit by KPMG into fraud allegations uncovered no need to restate earnings, but added that all the data needed to confirm past revenues could not be obtained.
KPMG reports clean bill of health for Wirecard fraud allegations
Wirecard hired the KPMG in October, which has been looking into the payment processor’s third-party partner business, as well as business activities in India and Singapore.
In a statement on the 28th April, Wirecard said the required data needed to conclusively approve revenues from 2016-2018 is “primarily in the control of third parties.” The company also added that its 2019 accounts will not be released on April 30, due to the COVID-19 virus and the KMPG report.
No incriminating evidence was found for the publicly raised accusations of balance sheet manipulation. In all four areas of the audit – third-party partner business (TPA) and Merchant Cash Advance (MCA) / Digital Lending as well as the business activities in India and Singapore – no substantial findings were found which would have led to a need for corrections to the annual financial statements for the investigation period 2016, 2017 and 2018.
The company has drip-fed parts of the report to the market, including last week saying KPMG had not made any substantial findings of questionable accounting methods in all four areas of the audit.
Wirecard has been trying to rebuild its reputation after facing repeated allegations about its accounting methods. Wirecard’s revenue soared in 2018 after it bought more than 15 companies in a few years. But in a series of articles, the Financial Times reported allegations of accounting fraud at Wirecard in several countries.
The company hired law firm Rajah & Tann to investigate its Singapore subsidiaries. A final report from the firm in March 2019 acknowledged accounting oversights and potential criminal liability among some Singapore staff, but didn’t find evidence of any linked to Wirecard headquarters.
The Financial Times also reported that substantial sales and profits were processed by Wirecard’s Dubai-based partner company Al Alam Solutions in the names of several clients that didn’t exist or had no record of a relationship with the firm. The company “categorically rejects” the allegations, calling them “nonsense,” a spokeswoman said in October.
Wirecard AG was handed the report on the special investigation by the auditing company KPMG in the early morning of April 28, 2020. It will be published at https://www.wirecard.com/transparency as soon as possible.
However, despite the seemingly upbeat review from KPMG shares fell as much as 15% in early trading in Frankfurt.
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