Wirecard thinks its $2.1 billion cash was a fiction in growing ‘disaster’

Wirecard thinks its $2.1 billion cash was a fiction in growing ‘disaster’
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FRANKFURT/MANILA (Reuters) – Wirecard said on Monday that 1.9 billion euros ($2.1 billion) it had booked in its accounts likely never existed, a black hole that threatens to engulf the payments firm and tarnish the reputation of Germany’s financial watchdog.

One-time investor darling Wirecard is holding emergency talks with its banks, who are owed roughly 1.75 billion euros, to avert a looming cash crunch triggered by the missing money.

Wirecard also said it is looking at the sale or closure of parts of its business, but its creditor banks are not interested in a fire sale, especially as litigation risks may put off buyers, one person close to talks told Reuters.

Felix Hufeld, head of Germany’s financial watchdog Bafin, described the crisis, which has seen around 11 billion euros wiped off Wirecard’s market value, as a “total disaster”.

“It is a scandal that something like this could happen,” Hufeld said.

Bafin’s own record has come under fire in Germany as Wirecard’s share price has imploded, hitting retail investors and some large money managers.

Source: Reuters

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