Wirecard Shares Tumble Amid Lack of Data for KPMG's Audit -- Update
By Mauro Orru
Wirecard AG's shares slumped Tuesday as KPMG's independent audit
into allegations of accounting impropriety at the company came to
an end, with the big-four accountancy firm unable to prove revenue
from Wirecard's third-party acquiring business due to a lack of
At 1340 GMT, Wirecard shares traded 26% lower at EUR98.00.
The German digital-payment services company commissioned an
independent audit--which KPMG had been conducting since October
2019--after a series of reports in the Financial Times alleging
accounting impropriety at Wirecard.
Wirecard said early Tuesday that the audit into its activities
in India, Singapore, its merchant cash advance division, as well as
its third-party acquiring business, found no incriminating evidence
of balance sheet manipulation for 2016, 2017 and 2018.
"This is overall positive news for Wirecard and we expect the
stock to eventually rerate. However, the lack of evidence to prove
2016-18 revenue from the third-party acquiring business will
probably continue to weigh on the stock in the short term," said
David Vignon, analyst at European investment bank Bryan
Wirecard said that while "available evidence and audit
procedures were sufficient to provide evidence of the revenues"
from the third-party acquiring business, not all data could be
obtained to prove revenue for 2016, 2017 and 2018 as the requested
documents are mostly in the third-party partner's access area.
The company added that KPMG didn't find any evidence suggesting
that the purchase price for the acquisition of the payment
businesses of Great Indian Retail Group wasn't objectively
Wirecard acquired the payments business of Great Indian Retail
Group for EUR230 million and further payments of up to EUR110
million in connection with the financial performance of the
acquired businesses for 2015, 2016 and 2017.
Wirecard said it made the payments exclusively to the seller,
"whose beneficial owner could not be finally verified by KPMG on
the basis of public registers."
Write to Mauro Orru at firstname.lastname@example.org; @MauroOrru94
(END) Dow Jones Newswires
April 28, 2020 09:58 ET (13:58 GMT)
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