Five things to know about the Wirecard scandal

FRANKFURT AM MAIN, Germany - German payments provider Wirecard is in crisis after it admitted Monday that 1.9 billion euros ($2.1 billion) recorded in its accounts "do not exist".

Here are the most important facts about a scandal that is drawing comparisons with the collapse of US energy company Enron in the early 2000s over accounting fraud.

What does Wirecard do?

At its heart, Wirecard is a payments processor, offering companies services allowing them to accept credit cards and digital payments like Apple Pay or Paypal in stores, online or on mobile.

The company collects a commission for assuring that merchants will receive the money they are owed.

Around that, it sells its customers extra services like analytics based on the data generated from those transactions that it says can help boost sales and track trends.

Wirecard claims around 300,000 firms worldwide as customers, and deals with giants in the sector like China's AliPay and WeChat, Apple and Google have offered hot prospects for growth.

How did Wirecard make it big?

Wirecard was founded in 1999, starting out offering its services to porn and gambling sites.

Such stable revenue streams helped it survive the early-2000s dotcom crisis, and as more savory forms of online commerce ramped up through the 2000s and 2010s, the group's star mounted with it.

In the early days, founder Markus Braun increased his stake to seven percent, becoming the largest shareholder.

Wirecard now highlights clients like KLM, Deutsche Telekom and FedEx on its website.

First listed on the Frankfurt stock exchange in 2005, by 2018 it elbowed traditional lender Commerzbank out of the blue-chip DAX share index.

In early 2019, Wirecard's market value hit around 17 billion euros, matching crisis-ridden Deutsche Bank with 15 times fewer workers and revenues.

The past week's revelations have now collapsed that value to two billion.

Why weren't weak spots uncovered?

Beginning in January 2019, a string of Financial Times reports highlighted accounting irregularities, notably in Wirecard's Asian division.

Bosses denied any wrongdoing and the German financial world appeared to close ranks around its favourite.

Markets watchdog BaFin announced a probe into potential links between the FT and short sellers betting against Wirecard stock.

The fact his agency did not catch the scandal sooner was "a shame", BaFin chief Felix Hufeld said Monday.

"We weren't effective enough to prevent something like this happening," Hufeld added.

Wirecard's status as a Payment Service Provider (PSP) subjected it to multiple EU directives since 2008 obliging it to better fight payment fraud, but companies are not subject to as much scrutiny over their accounting practices.

Who controls Wirecard?

Wirecard was founded by Austrian Markus Braun, who until Friday served as chief executive.

Braun resigned after the company was forced to acknowledge the 1.9 billion euros might be missing.

Chief operating officer Jan Marsalek had been dismissed the day before.

American James Freis, installed as compliance chief on Thursday, was promoted to acting CEO on Braun's departure.

Freis had previously been compliance chief at German stock market operator Deutsche Boerse.

Aside from Freis, Braun and the remainder of Wirecard's former four-person board are under investigation by Munich prosecutors over "market manipulation" relating to how they presented KPMG's findings in its audit of their old accounts.

Wirecard's five-person supervisory board is headed by Thomas Eichelmann, a former business consultant who later switched to the financial sector including a stint at Deutsche Boerse.

Who is behind the missing cash?

German news weekly Der Spiegel named Mark Tolentino, a lawyer working in the Philippines, as the trustee responsible for the missing cash.

Based in Philippine financial centre Makati City, his website had vanished by Monday, although a Facebook page with public legal Q+A video sessions remained online.

Meanwhile one of the country's largest banks -- BPI -- where some of the missing money was supposedly deposited -- confirmed to AFP that an employee was on "preventive suspension".

Media had reported that an assistant manager at BPI signed a forged document relating to the supposed deposits at the bank.

Agence France-Presse

BPI says services to 'normalize' on Friday

MANILA - Bank of the Philippine Islands said Friday it expected services to "normalize" within the day, as it reeled from a two-day disruption that inconvenienced customers.

Electronic channels have been hit with high traffic volumes since being restored at 9 a.m. on Thursday, which may lead to "intermittent difficulties," the bank said in a statement.

"We expect our services to normalize as the day progresses, and thank you for your patience and understanding," the bank said.

The bank said ATM and over-the-counter transactions were available.

Banks expect high transaction volumes on Friday due to the long weekend. Monday is a public holiday for Independence Day.

source: news.abs-cbn.com

Asian markets mixed on oil drop, Fed jitters

Philippine shares tumbled on Tuesday amid a mixed trading session in the region. Meanwhile, BPI buys into a rural bank while Calata Corp. expands into the real estate business. Michelle Ong with this report. -- ANC Business Nightly, August 23, 2016

source: www.abs-cbnnews.com

Shares snap losing streak after Fed decision

Philippine shares opened higher on Thursday, snapping four straight days of losses after the US Federal Reserve kept policy rates steady.

The Philippine Stock Exchange Index (PSEI) was up 0.54 percent to 7,219.19 in early trade. Analysts however said shares would trade within a tight range as investors stay on the sidelines ahead of the May 9 elections.

“We may have some slight relief but I think the markets will tend to hold in this range-bound pattern until elections are over,” Smith Chua, vice president at Bank of the Philippine Islands’ Asset and Trust management Group told ANC’s “Market Edge with Cathy Yang.”

Bangko Sentral ng Pilipinas Governor Amando Tetangco signaled he would keep local policy rates unchanged ahead of a monetary board meeting next month.

“At the moment, we really don’t expect any major developments cropping up that would necessitate a shift in our stance of policy,” Tetangco said in a statement.

The Federal Reserve action was “broadly in line” with market expectations and “should help clear up global positioning in the near term,” Tetangco said, adding a Bank of Japan decision on Thursday was also being monitored.

Tetangco said he did not see “significant changes in economic policy thrusts” after the May 9 elections. Tough-talking Davao City Mayor Rodrigo has widened his lead over erstwhile frontunner, Sen. Grace Poe, in the most recent surveys.

source: www.abs-cbnnews.com

Banks announce holiday schedule

MANILA – Several banks announced that they will be adjusting their schedules for the holidays.

For Bank of the Philippine Islands (BPI) and BPI Family Savings Bank, the following schedules will be implemented from December 24, 2015 to January 4, 2016:

• Dec. 24-25: All regular branches and all kiosks closed
• Dec. 26: Branches and kiosks with Saturday operations open
• Dec. 27: Branches and kiosks with Sunday operations open
• Dec. 28-29: All regular branches and kiosks (except those with Tue day-off schedules) open
• Dec. 30: Select branches open
• Dec. 31-Jan. 2: All branches and kiosks closed
• Jan. 3: Branches and kiosks with Sunday operations open

Regular operations of all branches and kiosks, except those with Monday day-off, are scheduled to resume on January 4, 2016.

BPI's ATMs, cash-deposit machines, POS terminals, electronic banking platform, and mobile app will be available for BPI online and mobile transactions during the holidays.

BPI Globe BanKO clients may also carry out transactions during the holidays at open partner outlets.
"In view of the long holiday, we urge clients to plan and complete their transactions ahead of time," BPI said in a statement.

For BDO Unibank, selected branches will be open on December 24, 26 and 27.

The full list of banks can be found on the bank's website.


BDO said its ATMs and electronic banking services will continue to handle transactions and other banking services.

China Bank, meanwhile, said almost half of its branch network will serve customers on December 24 and 31 and January 2.

On December 24, 46 China Bank branches in Metro Manila and 57 in the provinces will be open.

On December 26, 10 provincial branches are open on top of the 58 branches with regular Saturday banking schedule.

On December 31, 71 Metro Manila and 116 provincial branches will be open.

On January 2, 2016, branches with regular Saturday banking schedule will be open, as well as 64 China Bank branches in Metro Manila and 63 in the provinces.

China Bank branches that have regular Saturday and Sunday banking on December 26 and 27 and January 3 are also open.

"Selected branches that are open during the holiday break will be on a half-day banking schedule or shortened banking hours, which means closing one hour earlier than usual," China Bank said.

Its ATM, mobile and internet banking, and phone banking will also be available during the holidays.

source: www.abs-cbnnews.com