German prosecutors suspect Wirecard AG extended large loans to partner companies before its implosion in June, at a time when the payments company was already facing media reports alleging accounting fraud.[ASCHHEIM] German prosecutors suspect Wirecard AG extended large loans to partner companies before its implosion in June, at a time when the payments company was already facing media reports alleging accounting fraud.
The prosecutors surmise the loans by the disgraced German firm may have been unsecured and may have been made to partner companies in Dubai, Singapore and the Philippines, a person familiar with the matter who asked not to be identified discussing the private information said. The loans amount to US$1 billion and Wirecard claimed they were for advance payments to merchants processing card transactions through its partners in Asia, according to theA representative for the Munich prosecutors declined to comment. Wirecard has previously said it's not currently making statements to the press.
The digital-payments company filed for insolvency after admitting that almost two billion euros it previously reported as cash probably didn't exist. The accounting scandal has since widened to become Germany's worst and it now threatens to engulf top politicians, regulators and auditors.
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