An illuminated sign stands outside the Wirecard AG headquarters at dawn in the Aschheim district of Munich, Germany, on Tuesday, Feb. 12, 2019. Wirecard broke federal securities law by failing to act on an executive’s misconduct and misleading investors about it, a complaint filed Feb. 8 in the Central District of California alleges. Photographer: Michaela Handrek-Rehle/Bloomberg (Bloomberg)

German payments company Wirecard AG has been a hot growth story since Chief Executive Officer Markus Braun masterminded a string of acquisitions that doubled its revenue. Then its shares plunged more than 40 percent in early 2019 after allegations of accounting fraud surfaced. The company repeatedly denied wrongdoing and said an internal investigation cleared it of material faults, but it still remains under a cloud as authorities in Germany and Singapore continue independent probes. Their questions have greater urgency because Wirecard joined Germany’s benchmark stock index last year. From its start, the company has drawn unusual scrutiny.

1. What is Wirecard and what does it do?

Wirecard is a developer of software and systems for online payments and fraud protection used across the internet. Its technology helps process smartphone payments, issue credit cards, and detect suspicious activity. The firm’s revenue soared to 2.1 billion euros ($2.4 billion) in 2018 after it bought at least 18 companies over the space of several years. In September 2018, Wirecard replaced Commerzbank AG in Germany’s 30-company DAX stock index alongside titans such as Volkswagen AG, Siemens AG, and Deutsche Bank AG.

2. Why has Wirecard been controversial?

The company got its start in 1999 as a provider of financial services to the gambling and adult entertainment industries, operating in murky waters. While it’s now focused on more mainstream clients, Wirecard’s business model remains complex and it has had to defend its reputation repeatedly. The shares dropped after claims were made in 2008 about accounting irregularities and in 2016 amid fraud allegations, both of which Wirecard rebutted. Those accusations led to a market manipulation conviction against a journalist in 2012 and a fine against one of the suspects behind the 2016 report. Wirecard’s share price rose nearly five-fold between the start of 2017 and its peak in September 2018.

3. What are the recent claims against Wirecard?

In a series of articles starting on Jan. 30, the Financial Times reported allegations of accounting fraud at the company’s units in Singapore and other Asian countries. The stories cited a preliminary report from Singapore law firm Rajah & Tann, which Wirecard had hired to look into the matter. Germany’s financial regulator temporarily halted short sales of Wirecard’s shares in February after trading volumes spiked following the FT stories.

4. What is the company’s response?

Wirecard has repeatedly denied the allegations, saying they’re baseless and possibly brought forward to damage the company or profit from short sales. While a final report by Rajah & Tann in March 2019 acknowledged accounting oversights and potential criminal liability among some Singapore staff, it didn’t find evidence of criminal activity linked to Wirecard’s German headquarters. The sums involved are not material, the company said. Investors responded by lifting Wirecard shares the most in more than a decade, though they remained well off their peak.

5. Why is Wirecard being watched so closely?

Concerns about the company have taken on increased urgency since it joined the DAX, which is a popular investment vehicle for everyone from large pension funds to private investors. When German financial regulator BaFin banned short sales of Wirecard for two months starting in February, it said the affair posed a serious threat to market trust in Germany. Wirecard has also been drawn into a London lawsuit between former minority shareholders of an Indian business it bought in 2015.

(Corrects spelling of company name in reference shelf in story from March 29.)

--With assistance from Karin Matussek, Nicholas Comfort and Jan-Patrick Barnert.

To contact the reporter on this story: Stefan Nicola in Berlin at

To contact the editors responsible for this story: Giles Turner at, Andy Reinhardt

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