Munich lawyer Michael Jaffé has been appointed to oversee the proceedings after the collapse of the high-flying group, which became insolvent last month in one of the biggest accounting frauds in post-war history in Germany.
The company, which is indebted for 3.5 billion euros, revealed in June that a large part of its activity in Asia – which was subcontracted to external partners and represented half of the group’s declared income – had was falsely presented to investors. Wirecard also warned that it was missing 1.9 billion euros in cash in its accounts.
Jaffé said Tuesday he had taken steps to “secure [Wirecard] active on different international sites ”and that a team of specialists analyzed its payment flows in order to discover the causes of the company’s crisis.
Wirecard shares, which has long been considered one of Germany’s most successful start-ups, have slumped more than 98% since mid-June, wiping out more than 12 billion euros in market value .
Deutsche Bank has become one of the potential candidates for Wirecard’s payment processing activity. Last week, he said he was ready to provide financial support to Wirecard Bank, which is not part of the insolvency proceedings and processes payments as usual.
Deutsche chief executive Christian Sewing said on Tuesday that it was “almost an obligation” for the largest German lender to turn to Wirecard Bank, since Deutsche is focused on banking and payments. “We all need transparency and this is the first task,” said Sewing during a webcast hosted by Bloomberg News, adding that it was “too early to judge” how most big lender from Germany could get involved.
In terms of potential divestments, most of the progress has been made with Wirecard’s US subsidiary, Wirecard North America, said the administrator. The former Citi Prepaid Card Services company, bought by the German company for an undisclosed amount in 2016, went on sale and mandated the investment bank Moelis & Company to manage the process.
Additional sales procedures for other international subsidiaries, as well as for Wirecard’s core business, the settlement of electronic payments in Europe and the issuance of credit cards, “are being launched,” said the administrator.
Soon, potential suitors will be able to start exercising due diligence, he added. The goal was to come up with “timely solutions with investors for the benefit of creditors, employees and customers”.
The Financial Times reported on Monday that Wirecard’s core business outside of Asia, which is not directly affected by accounting fraud, has been in deficit for years, according to internal figures in an appendix to the audit. KPMG Special on Wirecard Accounting.