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Wirecard stock plunges almost 50%, says €1.9bn of missing cash does not exist

Scandal-hit German firm Wirecard warned investors that the €1.9bn it has spent the last several weeks searching its banks for probably does not exist.

The fintech payments firm said it would probe whether its trustees who set up the cash fund acted for the “benefit of the company”, it added in a statement on Monday.

The company said it will withdraw its financial results for 2019, and is looking at “a broad range of possible further measures to ensure the continuation of its business operations.”

Stock in the former champion of Germany’s tech sector, which processes payments for companies including Visa and Mastercard, opened 46% down in morning trading in Frankfurt.

Wirecard needs fresh cash by end of June

Wirecard said after searching the account of several of its banks over the last few weeks “there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist”.

It added that it was investigating its trustees, who set up the fund to acquire rivals, to see to “what extent such business has actually been conducted for the benefit of the company”.

Wirecard said it has hired investment bank US Houlihan Lokey to raise finance ahead of the end of June, when it is due to seek fresh capital from its banks.

The Philippine central bank is the latest lender to have been drawn into the German firm’s desperate search for cash. It said on Monday that none of the money appeared to have entered the country, after Bank of the Philippine Islands (BPI) and BDO Unibank said documents purporting to show Wirecard had deposited funds with them were false. Both said Wirecard was not a client.

Wirecard’s latest announcement follows the exit on Friday of former chief executive Markus Braun (pictured), who was replaced by James Freis, who only joined the company on Thursday from Deutsche Börse.

The firm has been fighting whistleblower allegations of accounting fraud for more than 18 months. A forensic audit by KPMG, which Wirecard’s supervisory board commissioned after the FT reports, failed to allay concerns when its findings were published in April.

Munich-based Wirecard has been lauded as a home-grown fintech success and was propelled into Germany’s blue-chip DAX index in 2018.

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Roger Baird

Roger Baird is News Editor at Finixio. He has worked as a financial journalist for 20 years reporting on companies, capital markets and the UK economy.