Singapore company director charged over Wirecard scandal

SINGAPORE - A company director has been charged in Singapore with falsifying letters linked to scandal-hit German payments giant Wirecard, according to court documents, as the fallout from the firm's collapse spreads further around the world.

The fintech company filed for insolvency in June after admitting that 1.9 billion euros ($2.2 billion) missing from its accounts did not exist, revelations that stunned Germany and drew comparisons with the Enron accounting scandal.

R. Shanmugaratnam, director of a business administration firm in Singapore at the centre of investigations into the case, has been charged with falsifying letters showing it held money in escrow for Wirecard.

The 54-year-old of Citadelle Corporate Services claimed in the letters in 2016 and 2017 the firm held amounts ranging from 30 million euros to around 177 million euros in accounts on behalf of Wirecard, according to court documents seen by AFP Friday.

But the accounts did not hold such amounts and the letters were produced with the "intent to defraud", according to the charges, filed last month.

Shanmugaratnam could not immediately be reached for comment.

Authorities in the city state last month launched an investigation into Citadelle and another company over suspicions they falsified accounts, and Shanmugaratnam is the first person to face charges.

Wirecard's woes began in January 2019 with a series of Financial Times articles alleging accounting irregularities in its Asian division, headed by chief operating officer Jan Marsalek.

German and Philippine authorities want to question Marsalek as part of separate investigations into Wirecard, but his whereabouts are unclear.

Last month, the Philippines justice minister said immigration officers falsified records to show he briefly visited the country after being sacked.

Entries in the Bureau of Immigration database show Marsalek arrived in the Philippines on June 23 -- the day after he was fired -- and left for China on June 24.

But CCTV footage, airline manifests and other records prove Marsalek was not in the country on those dates, minister Menardo Guevarra said in a statement.

The firm's troubles exploded in June when long-time auditors Ernst & Young said they were unable to find the 1.9 billion euros, and that they had been fed false statements.

Agence France-Presse

Germany vows to beef up finance watchdog after Wirecard drama

FRANKFURT AM MAIN, Germany -- German Finance Minister Olaf Scholz said Sunday he wanted to overhaul the country's finance watchdog Bafin and give it more powers after a massive fraud scandal involving digital payments firm Wirecard.

Wirecard filed for bankruptcy late last month after admitting that 1.9 billion euros ($2.1 billion) was missing from its accounts, a case that has triggered criticism of the auditors and regulators meant to be overseeing the firm.

Scholz told the Frankfurter Allgemeine Sonntagszeitung newspaper he wanted to ditch the current two-stage procedure whereby Bafin is only called in when red flags are raised in a first vetting of accounts by a private monitoring body.

"We need far-reaching reforms," Scholz said, adding that Bafin needed to step in earlier and have the right to launch "special audits on a large scale".

"I want to give Bafin more control rights over financial reports, regardless of whether the company has a banking division," he went on.

"If we decide that Bafin needs more money, more employees and more competencies, I will work to ensure that happens." 

Bafin chief Felix Hufeld has admitted that his watchdog "had not been effective enough" at preventing the Wirecard disaster.

But auditing firm EY has also come under scrutiny for signing off on Wirecard's accounts for years before finally warning last month of an "elaborate and sophisticated fraud" at the payments provider.

The scandal has raised questions about whether auditing firms should be rotated more frequently, Scholz said, and whether it makes sense for them to advise and monitor a company at the same time.

German shareholders' association SdK, which has launched legal action against two EY auditors and one former employee over Wirecard, welcomed Scholz's proposals.

Bafin needs to be "completely rebuilt," SdK chief Daniel Bauer told the Handelsblatt financial daily.

"It's not enough to increase the number of employees," he warned. "They have to be the right employees who actually understand the subject matter."

Agence France-Presse