Wirecard’s $2.1 Billion Hole Deepens After Forgery Claim

Wirecard AG shares continued their free-fall after the two Asian banks that were supposed to be holding 1.9 billion euros ($2.1 billion) of missing cash denied any business relationship with the German payments company.

Wirecard now faces a potential cash crunch. The company warned Thursday that loans up to 2 billion euros could be terminated if its audited annual report was not published on Friday. Analysts at Morgan Stanleyestimated that Wirecard has available cash of around 220 million euros, if it cannot locate the missing $2.1 billion.

BDO Unibank Inc., the Philippines’ largest bank by assets, and the Bank of the Philippine Islands said in separate statements on Friday that Wirecard isn’t a client.

“It was a rogue employee who falsified documents and forged the signatures of our officers,” BDO Unibank Chief Executive Officer Nestor Tan said in a mobile phone message. “Wirecard is not even a depositor — we have no relationship with them”.

The Bank of the Philippine Islands said in a separate statement that Wirecard isn’t a client and it continues to investigate the issue.

Wirecard shares plunged 24% at 9:11 a.m. in Frankfurt on Friday, taking the stock’s losses to 71% since Wednesday’s close. The company that was worth 24.6 billion euros in September 2018 when it entered Germany’s Dax index is currently valued at about 3.4 billion euros.

The denials from BDO and BPI follow a statement on Thursday from Wirecard, which claimed that auditor Ernst & Young couldn’tconfirm the location of the missing cash that was supposed to be held in Asian banks and reported that “spurious balance confirmations” had been provided.

BDO has reported the Wirecard issue to Bangko Sentral ng Pilipinas, the Philippines central bank, Tan said.

The crisis has engulfed Wirecard in recent days. The payments company suffered one of the worst stock slumps in the history of Germany’s benchmark index after warning that as much as 2 billion euros in loans could be called due if its audited annual report, delayed for the fourth time, was not published by June 19.

Wirecard spokespeople did not immediately return calls and emails for comment.

Read More: Wirecard Suspends Executive After $2.1 Billion Goes Missing

Wirecard Chief Executive Officer Markus Braun said the trustee involved is in “constant contact” with EY and the company has promised to clear up the issue quickly with two Asian banks.

The company temporarily suspended its outgoing Chief Operating Officer Jan Marsalek, it said in a statement late Thursday. Marsalek — who has been suspended on a revocable basis until June 30 — had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, but wasn’t successful, a person familiar with the mattersaid Thursday. It’s unclear if the funds can be recovered, the person added.

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