What is wire card

In 1999, Wirecard was born. On all continents, Wirecard has given electronic payment transaction
services. The company was estimated at $28 billion at its height. It was one of the 30 listed
companies on the prestigious DAX stock index of Germany. Wirecard collapsed and went into
bankruptcy in Germany on 25 June 2020. Owing creditors more than 3.5 billion euros i.e. almost $4
billion after disclosing a gaping hole in its books that its auditor EY said was the result of a
sophisticated global fraud.

WHAT EXACTLY HAPPENED AT WIRECARD?

There have been lawsuits against Wirecards about accounting irregularities for several years. In
order to inflate revenue and profits, media reports and whistleblowers alleged that the company
had faked its sales transactions. After the Financial Times released a series of inquiries into these
allegations, Matter arrived at a head in 2019. Wirecard then defended itself against critics and
vigorously hit back, even suing the Financial Times. Later in 2019, the accounting firm KPMG was
called in by wirecard as an outside auditor to run an independent probe.

KPMG dropped a bombshell in April 2020, announcing that it could not audit cash balances
amounting to EUR 1 billion. Also it was unable to trace vast sums of advances to merchants

The results led to calls for Wirecard's CEO, Markus Braun, to be removed.

JUNE 2020’

The accounting firm EY, the auditor of Wirecard for over a decade, refuses to sign off on the 2019
account of the company in June 2020. Saying that false information about the company's accounts
had been given, it could not confirm whether there were balances worth EUR 1.9 billion.

The missing money was sent to two banks in the Philippines, Wirecard insisted. But both banks
denied to consider that the money was sent.

As a result, Braun resigned on june 19, and three days later, the company admitted of a “prevailing
likelihood” that the 1.9 billion euros did not exist. On June 23, German authorities detained Braun
and on June 25, after negotiations with creditors failed, Wirecard filed for insolvency.