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Wirecard: Missing EUR1.9 billion likely "does not exist"

Wirecard: Missing EUR1.9 billion likely "does not exist"

Stricken German payments processor Wirecard has called in investment bank Houlihan Lokey to assess its financing options after admitting that "there is a prevailing likelihood that the bank trust account balances in the amount of EUR1.9 billion do not exist".

The news just goes from bad to worse for Wirecard, which in the past few days has seen the resignation of its chief executive officer, the termination of its COO, and a calamitous collapse in its share price following revelations of dodgy accounting practices at a number of its subsidiaries.

The missing EUR1.9 billion, supposedly held under escrow at two Asian banks for the benefit of the company in its third party acquiring business, had been previously been recognised as an asset in its financial accounts.

"The Management Board further assesses that previous descriptions of the so called Third Party Acquiring business by the company are not correct," says the firm in a statement. "The company continues to examine, whether, in which manner and to what extent such business has actually been conducted for the benefit of the company."

As a result, Wirecard has withdrawn all of its most recent financial results statements dating back to November 2019 and warned that potential effects on the annual financial accounts of previous years cannot be excluded.

Working with Houlihan Lokey, the firm says it is assessing options for a "sustainable financing strategy for the company" and considering a broad range of possible further measures to ensure continuation of its business operations.

These include cost reductions as well as restructuring, disposal or termination of business units and products segments.

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