Germany’s fallen financial services giant Wirecard was looted by top executives before its eventual collapse in June, a new report has revealed. The report claims that the executives funneled over $1 billion to suspicious partner companies in Asia.
Wirecard filed for insolvency in June in one of the biggest accounting scandals in Europe. However, according to a report by the Financial Times, the company’s financial woes started months earlier, with its executives allegedly leading the looting.
The report claims that top ranking executives at the Munich-based company began funneling tens of millions of euros to suspicious companies in Asia. They embezzled from Wirecard under the guise of unsecured loans to these Asian firms. In their financial reports, they claimed that the loans were for advance payments to Asian merchants who were processing card transactions for Wirecard.
The looting accelerated in the months leading to the collapse, FT claims, citing sources with insider knowledge about the firm. In the first three months of this year, over $182 million was paid out to these ‘partner’ companies.
The biggest recipient of the embezzled funds was Ocap, a Singaporean company run by a former Wirecard executive. In Q1 this year, Ocap received $117 million, for a total of $270 million in debt owed to Wirecard.
Other beneficiaries were Ruprecht, yet another Singaporean company which received $47 million from Wirecard. Ruprecht suspended its operations last week, just one month after the collapse of Wirecard. The others were PayEasy in Manila, Dubai’s Al Alam and Singapore’s Senjo.
This additional lending to these firms pushed Wirecard’s loans to business partners to €870 million ($1 billion) by March this year, FT revealed.
The suspicious lending to the third party companies was overseen by Jan Marsalek, Wirecard’s former chief operating officer. As CoinGeek reported in July, Marsalek is on the run and is believed to be Russia.
Christopher Bauer, yet another highly-implicated former Wirecard executive, died on August 9 in Manila under suspicious circumstances. Bauer was formally in-charge of Asia, the region where the looting took place. He then went on to run PayEasy in Manila, one of the companies that received the unsecured loans. As per a Bloomberg report, he allegedly died of blood poisoning.
Wirecard is the first member of Germany’s DAX index—which comprises of the 30 largest companies in Germany—to file for insolvency. Its failure has inflicted great reputational damage on Germany’s stock market, and especially on the regulator, BaFin.
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