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Status: December 15, 2021 5:13 a.m.
According to information from BR Recherche, Wirecard was on the verge of being exposed in the spring of 2019. The EY auditors approved the balance sheet despite many inconsistencies.
Wirecard has its back to the wall in spring 2019: after media reports on fake sales in Asia, the share price collapses dramatically. The balance sheet for the 2018 financial year is due to be presented at the end of April. EY’s long-standing Wirecard auditors prepared a presentation for the Supervisory Board in advance. she lies BR research before.
In it, EY explains: Sales from several Wirecard subsidiaries in Asia are “non-existent”. It’s about ten million euros, which, according to EY, have been booked out. Also recorded in this presentation: Wirecard has added a turnover of eleven million euros to its balance sheet. These come from alleged software sales by a Wirecard subsidiary based in Dubai. But these sales are also lagging behind BR-Search does not exist.
Revealed, but not on the balance sheet
The allegations in connection with the fully booked bogus business in Asia are serious: Wirecard had already commissioned the law firm Rajah & Tann in Singapore to investigate the bogus business in 2018. The reason was tips from a whistleblower to corporate headquarters. The law firm’s final report will be ready in April 2019. Result: The simulated transactions involved balance sheet manipulation, forgery of documents and fraud.
EY was also familiar with this report. The auditors should not have withheld this background in their attestation, says Hansrudi Lenz, professor of auditing at the University of Würzburg: “If I consciously manipulate contracts and set up non-existent contracts, then for me it is a conscious manipulation of the accounting and not a simple oversight . “
Newly invented sales compensate for sham deals
In the 2018 annual report, Wirecard presented the situation differently: There it was only mentioned that sales of ten million euros were “initially recorded in the wrong business units of the group”. “After correction, the entire software business was recorded in the correct business unit of the group.” So just a booking error.
In fact, the Aschheim-based payment service provider has offset the booked sales in the balance sheet with the supposedly new software deals. But where do these new sales come from? The focus is on the Wirecard subsidiary Cardsystems Middle East in Dubai. She reportedly sold payment processing software to two companies in 2017. For eleven million euros. They will be booked for the first time in April 2019.
The opaque role of Chan Chee P.
The buyers of the software are allegedly a company called Synergistics, also based in Dubai, and a travel company in the Maldives called “LetsGoMaldives”. The auditors are asking Wirecard to provide evidence of these new sales.
However, when examining the documents submitted, EY apparently did not notice numerous inconsistencies. According to Wirecard, the software deals between Cardsystems and Synergistics and LetsGoMaldives were already completed in 2017. It was engineered by a Malaysian businessman named Chan Chee P. – of all things, because this man was already involved in the fully booked bogus deals in Asia.
In the opinion of the balance sheet expert Professor Hansrudi Lenz, EY should now have to draw conclusions at the latest: “If this broker goes out of one door, so to speak, and comes back in through the other door and transfers sales to other companies that did not take place before, then he has to of course you take this as an opportunity to investigate closely. “
Then EY should have noticed that in spring 2019 there was no evidence of alleged commission payments. Because Chan Chee P. only issued an invoice for one million euros on July 22, 2019 for brokering the new software deal.
“Never heard of” from alleged software broker
The managing director of the travel portal LetsGoMaldives, one of the alleged software buyers, does not want to give an interview. On the phone he says that he has never heard of the agent Chan Chee P. and his companies. There is no contract for the software delivery of the Wirecard subsidiary Cardsystems.
The head of the second alleged software buyer Synergistics, Tarek M., deleted his Internet profile on the career network LinkedIn immediately after BR research send him a questionnaire. He does not respond to text messages. Allegedly, the EY examiners will meet him in Dubai in spring 2019. In doing so, they apparently do not notice: Tarek M. works for the local police, back then in the area of combating money laundering.
Ten million euros for the former head of the Libyan secret service
Another process is remarkable: the Wirecard subsidiary Cardsystems originally did not even have any software. She buys them according to the from BR research evaluated documents allegedly in August 2017 by a company called PMFG. It should also be in Dubai. The company is not registered there. In addition, the PMFG did not issue Cardsystems with an invoice for ten million euros until almost two years later, during the ongoing 2019 audit. The Wirecard Management Board immediately releases the amount for transfer.
However, the amount will be transferred to the account of “Aegean Danismanlik”, ie to another company. It’s in Istanbul. According to the commercial register, Rami El-Obeidi is registered as a partner. He is a confidante of Jan Marsalek. A simple internet search would have already shown in spring 2019 that this was a former Libyan secret service chief. EY did not fault that.
EY explains on a detailed basis BR-General request that the auditors had “carried out extensive audit procedures and adapted the audit to the information available at the time”.
More bogus software deals
To BR-Research should have made EY suspicious of a number of other software sales. Because: The Wirecard subsidiary Cardsystems wants to have sold the alleged software for payment services to nine other companies for a total of almost 40 million euros. Some customers bought the software before Cardsystems bought it themselves. This is also evident from the documents. EY didn’t seem to notice.
Marsalek and the Saudi sovereign wealth fund
One of these software deals is particularly eye-catching. He shows how ex-board member Jan Marsalek proceeded to prove the bogus deals. It is about an allegedly joint project with the Saudi state fund. The name of the project: “Fineom”. In March 2019, Wirecard will create a presentation for this and advertise that it is even in contact with the former Siemens CEO Klaus Kleinfeld. Kleinfeld worked as a consultant for the Saudi royal court in 2017 and 2018.
But the project quickly petered out. An invoice for 3.4 million euros for software that Wirecard allegedly delivered is never paid. EY has objections to this, but sales remain on the balance sheet. In the end, Wirecard received an unqualified certificate from EY in April 2019.
Could investors have been better protected?
For the FDP politician Florian Toncar, who sat on the Wirecard investigative committee, it is clear: If Wirecard had to admit the sham deals in April 2019, “the company would have come to an end much faster. And so would the shareholders the banks would have been much less damaged than what unfortunately happened in the end. “
EY’s approach to investigating suspicious software businesses could be relevant to tens of thousands of investors. So far, they have failed in court with claims for damages – among other things because judges assume that EY cannot prove any wrongdoing.