We have launched our mobile app, get it now. Call : 9354229384, 9354252518, 9999830584.  

Tags Current Affairs

Wirecard scam

Date: 23 July 2020 Tags: Miscellaneous


It has almost been a month since the controversial financial services giant Wirecard declared bankruptcy in Germany but details of it are yet to be unveiled.



Wirecard, which offered electronic payment transaction services, risk management as well as physical and virtual cards, collapsed on June 25, owing creditors more than €3.5 billion.



  • The scandal, arguably Germany’s biggest since Volkswagen’s ‘Dieselgate’ crisis of 2015 and the Siemens corruption scandal of the late 2000s, is being called “Germany’s Enron”– referring to the 2001 accounting scam by the US energy company Enron.

  • For many years, there had been complaints of accounting irregularities against Wirecard, and matters came to a head in 2019. Media reports and whistleblowers alleged the company had faked its sales transactions to inflate revenue and profits.

  • Later in 2019, the accounting firm KPMG was called in as an outside auditor to run an independent probe. In April 2020, KPMG dropped a bombshell, revealing that it could not verify cash balances of €1 billion, and was unable to trace vast sums of advances to merchants.

  • In June 2020, the accounting firm EY refused to sign off on the company’s 2019 accounts, saying it had been provided false information about company accounts, and could not confirm whether balances worth €1.9 billion existed.

  • Wirecard insisted the missing money had been sent to two banks in the Philippines — a claim that was refuted by both the banks as well as the country’s central bank.

  • Wirecard faked two-thirds of its sales, meaning there would be no way it would be able to repay all its debt, notwithstanding all the legal challenges it will face.

  • It owes its creditors around €3.5 billion, out of which €1.75 billion come from 15 banks plus a €500 million issued in bonds.

  • Founded in 1999, Wirecard offered electronic payment transaction services in all continents. At its peak, the company was valued at $28 billion and was among the 30 listed companies on Germany’s prestigious DAX stock index. 

Notice (8): Undefined variable: quizpole [ROOT/plugins/Studyiq/src/Template/Pages/tagdetails.ctp, line 161]