Updated: BDO says it’s a victim in $2.1B Wirecard fraud: Scammers faked our docs, forged officers’ signatures

BDO Unibank Inc. says it is one of the victims in the Wirecard scam involving $2.1 billion in missing funds.

“We are not involved in the Wirecard affairs. Wirecard is not a client. We have no relationship with them. BDO was used and is not party to the issue, ” said BDO president Nestor V. Tan in a statement.

“The document claiming the existence of a Wircard account with BDO is a falsified document and carries forged signatures of bank officers. The matter has already been reported to the Bangko Sentral ng Pilipinas, ” Tan added.

Bloomberg had earlier reported that BDO was one of two Asian banks (that reportedly held escrow funds for Wirecard) involved in the search for Wirecard’s missing funds.

The Wirecard board headed by Markus Braun — all four members being under investigation — have filed a legal complaint against “unknown persons”, saying they could have fallen victim to a vast fraud.

“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred,” chief executive Markus Braun said.

Wirecard said in a statement that auditors Ernst and Young identified “spurious balance confirmations” relating to “cash balances on trust accounts”.

The auditor’s red flag was raised over escrow accounts at two Asian banks, which were supposed to hold 1.9 billion euros ($2.1 billion) to manage risk for merchants using Wirecard’s payment services.

EY received “communications from the two banks that have been managing the escrow accounts since 2019, according to which the account numbers in question could not be assigned,” Wirecard said.

It added there were “indications” that the balances had been falsified “in order to deceive the auditor”.

But the clock is ticking for Wirecard, as two billion euros of credit could be withdrawn if it is unable to publish its results for last year by Friday. Thursday morning was supposed to bring the long-awaited publication of 2019’s figures.

Many investors have already pulled the plug, with the stock plunging around 70 percent in afternoon trading in Frankfurt, to around 32 euros.

Until now, Wirecard had been seen as a potential winner from the coronavirus crisis, as more people turned to online shopping and boosted throughput for its electronic payments systems.

But the company entered 2020 already dogged by a series of articles in the Financial Times last year alleging accounting irregularities in its Asian operations.

The four board members have been under investigation since early June by Munich prosecutors for “market manipulation”, and Wirecard’s HQ was searched as part of the probe.

Market watchdog BaFin said it had referred the case to prosecutors over the company’s presentation of interim results from a KPMG review of the company’s books for 2016-18.

Wirecard attempted to present intermediate steps of the audit in a favourable light, which prosecutors said “could have given misleading signals for the company’s stock market price”.

“Of course, current events will flow into our ongoing investigation over market manipulation” a BaFin spokesman told AFP Thursday.

German stock market operator Deutsche Boerse said it too was examining how Wirecard might be punished for its repeated failure to report results.

In preliminary figures presented Thursday, the group said it had processed 173 billion euros of transactions in 2019, up 38.5 percent.

Revenues grew 37.5 percent, to 2.8 billion euros, while net profits added 39 percent at 482 million, Wirecard added.

(With a report from Agence France Presse)

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