Crime auditor EY sees herself as a victim of fraud

19:26  25 june  2020
19:26  25 june  2020 Source:   rp-online.de

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Frankfurt. Wirecard is on the verge of bankruptcy, millions of investors have been lost and the auditing firm EY, which has audited Wirecard's figures for years, sees itself as a victim.

 Der Schriftzug von Wirecard ist an der Firmenzentrale des Zahlungsdienstleisters zu sehen (Archivbild). © Tobias Hase The Wirecard lettering can be seen at the payment service provider's headquarters (archive image).

After a huge balance sheet scandal, the payment service provider Wirecard is on the verge of bankruptcy. In view of a 1.9 billion euro hole in the balance sheet, Wirecard announced on Thursday that it would file for bankruptcy due to impending insolvency and over-indebtedness. It is one of the largest bankruptcies in the Federal Republic that shakes confidence in Germany as a financial center. The auditing firm EY, which had been auditing Wirecard's numbers for years, sees an ingenious, global fraud system that has been used to dupe them as much as investors. For the first time in the more than 30-year history of the Dax, a member of the leading German index collapses. The shares plummeted by almost 80 percent to EUR 2.50. At their weddings, the papers were worth just under 200 euros, a week ago they were still 100 euros.

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"There are clear signs that this was an elaborate and sophisticated scam involving a wide range of parties around the world from different institutions, with the aim of deception," said the Germany subsidiary of EY. The company, which is one of the four largest auditors in Germany, justified itself that such fraudulent agreements, which put the wrong tracks at great expense and with documents, could not be detected even with the best test methods. In addition to a wave of lawsuits, EY is particularly at risk of massive damage to its reputation. The auditors had only noticed when checking the 2019 balance sheet that bank confirmations for trust accounts in the Philippines were falsified. The accounts should have 1.9 billion euros - a quarter of the total assets.

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It was only after EY refused the certificate under the balance sheet a week ago that the house of cards collapsed. Wirecard had for years defended itself against allegedly falsifying the balance sheet. The company, founded in 1999, had allegedly grown at a rapid pace in recent years and had pushed Commerzbank out of the DAX just two years ago. At the best of times, Wirecard was worth almost € 25 billion on the stock exchange. but the story of successful fintech from Germany turned out to be an illusion. "It was shocking to see that two-thirds of sales only existed on paper," said an insider from Reuters. "There is a healthy core, but there is no chance of repaying the 3.5 billion euros in debt."

According to Wirecard, the creditor banks could have terminated or not extended 1.3 billion euros in loans by the end of the month. But the talks about it were stopped because of hopelessness. "The money is gone," it said from a bank. "We may get a few euros back in a few years, but we have to write off the loan now." Another creditor representative spoke of "criminal energy that had been at work for years". What remains of Wirecard is questionable. Competitors would not need Wirecard technology - and could simply pull customers, including companies like Aldi, Ikea or KLM, over to their platform.

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The financial regulator BaFin is at least trying to keep the Wirecard Bank subsidiary out of insolvency, the accounts of which currently have customer deposits of 1.4 billion euros. In sales, however, it is closely intertwined with the parent company.

The authority that acted late against Wirecard is heavily criticized. "Heads have to roll in financial supervision," said left-wing fiscal politician Fabio de Masi. "The bankruptcy filing from Wirecard is a fiasco for the German financial center." The Green finance politician Danyal Bayaz fell into the same horn. "The fact that a Dax group was able to slip into bankruptcy as a star on the stock exchange within a very short time casts a bad light on Germany as a whole," said Bayaz. "Especially the BaFin and auditors have to explain comprehensively why this development could never have been foreseen and prevented." According to the rules of the German Stock Exchange, the share will probably remain in the Dax until September.

The public prosecutor's office in Munich is investigating suspected accounting fraud and market manipulation. It is aimed at the former CEO and major shareholder Markus Braun, who has headed Wirecard for almost 20 years. Braun is released again on bail of five million euros. Former board member Jan Marsalek, who is considered a close confidant of Braun, may be in the Philippines. Bankruptcy itself could also become a case for law enforcement officers.

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What to do in case of identity theft? .
There is a good example of classic identity theft in literature: In the novel by Patricia Highsmith and the film of the same name "The talented Mr. Ripley" Tom Ripley is so fascinated by his friend Dickie that he always imitates him more realistically. He finally murders Dickie and pretends to be himself. © Photo: Christin Klose / dpa-tmn Where do all the bills come from? If you are certain that you have not ordered anything, you have probably become a victim of identity theft.

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