Research on Wirecard's third-party acquiring business argued that the bulk of reported profit sat in opaque Asian partners whose cash could not be verified. €1.9 billion of trust account cash was subsequently found not to exist.
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Where the profit lived
Wirecard's disclosed segment profitability was concentrated in third-party acquiring partners in jurisdictions where independent verification was near-impossible.
Findings
- Partner entities with negligible physical presence booked outsized transaction volume
- Trust account balances confirmed only by documentation of dubious provenance
- Serial acquisitions of low-quality assets used to absorb and obscure cash movements
The conclusion
Remove the unverifiable partners and Wirecard's core business was substantially unprofitable.
subsequent events
- 2020-04-27Special audit report cannot verify majority of TPA revenue
- 2020-06-18€1.9 billion confirmed missing; CEO resigns
“The core business, stripped of unverifiable partners, does not make money.”
- 2020-06-25Wirecard files for insolvency
Source — https://viceroyresearch.org/
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