Wirecard Says Its Business Activities Continue

Wirecard AG (WRCDF.PK) said Saturday that its business activities will be continued.

The company on Thursday decided to file an application for the opening of insolvency proceedings amid a massive accounting scandal that left the German payment-processing firm scrambling to find 1.9 billion euros missing from its balance sheet.

As a first step, the competent Munich Local Court has commissioned the Munich lawyer Dr. Michael Jaff as an official expert, the company said in a statement on Saturday.

The company expects a provisional insolvency administrator to be appointed for Wirecard AG shortly.

The business operations of the Group companies including the licensed units are currently ongoing. The parent company performs some central functions for the subsidiaries. As previously reported, it is being continuously reviewed whether insolvency applications also have to be filed for subsidiaries of the Wirecard Group. With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present.

Wirecard Bank is currently not part of the insolvency proceedings. The electronic funds transfer of Wirecard Bank are not affected.

Wirecard Card Solutions Limited, headquartered in Newcastle, UK, has suspended its business operations due to an order issued by the competent supervisory authority, Financial Conduct Authority. The company has discussed measures with the authorities. The measures are being undertaken and will hopefully enable it to continue operations.

The TPA business in question is still under review. The newly appointed CEO of Wirecard AG, James H. Freis, Jr., took a new approach to investigating the known allegations immediately upon taking office.

On Friday, the European Commission asked its markets regulator to investigate German financial watchdog BaFin over its handling of accounting scandal at Wirecard AG, which led to the collapse of the payments company.

The accounting scandal at Wirecard had led to the arrest of its former chief executive officer Markus Braun by the German police.

Braun resigned last week as member of the management board of Wirecard as the auditor Ernst & Young found that no sufficient audit evidence could be obtained of cash balances on trust accounts to be consolidated in the consolidated financial statements in the amount of 1.9 billion euros.

Later, Wirecard said the missing 1.9 billion euros of cash probably does not exist.

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