The logo of the financial services company Wirecard at the company headquarters near Munich. The Philippines central bank says the missing funds from the payments company have not entered the country's financial system. EPA
The logo of the financial services company Wirecard at the company headquarters near Munich. The Philippines central bank says the missing funds from the payments company have not entered the country's financial system. EPA
The logo of the financial services company Wirecard at the company headquarters near Munich. The Philippines central bank says the missing funds from the payments company have not entered the country's financial system. EPA
The logo of the financial services company Wirecard at the company headquarters near Munich. The Philippines central bank says the missing funds from the payments company have not entered the country'

Search for Wirecard's missing $2.1bn hits dead end in Asia as chief executive departs


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None of the $2.1 billion (Dh7.7bn) missing from scandal-hit German payments firm Wirecard appears to have entered the Philippine financial system, the central bank said on Sunday.

Bangko Sentral ng Pilipinas governor, Benjamin Diokno, said in a statement the South-East Asian country’s biggest lenders, BDO Unibank and Bank of the Philippine Islands, suffered no losses, despite having been named in connection with the missing funds.

Wirecard chief executive Markus Braun, who built the company into one of the hottest financial technology investments in Europe and a rare tech champion for Germany, quit on Friday as the company faces a cash crunch after saying it may have been the victim of fraud.

The search for the missing cash hit a dead end in the Philippines, but the two Philippine banks have said documents purporting to show Wirecard had deposited funds with them were false.

“The initial report is that no money entered the Philippines and that there is no loss to both banks,” Mr Diokno said, though he added that the central bank was investigating.

“The international financial scandal used the names of two of the country’s biggest banks – BDO and BPI – in an attempt to cover the perpetrators’ track,” he said.

BDO and BPI have stated that Wirecard was not their client and that they had no business relationship with the German firm, Mr Diokno said.

BPI, however, told Reuters on Saturday that it had suspended an assistant manager whose signature appeared on one of the fraudulent documents.

BDO told the central bank that it appeared one of its marketing officers had fabricated a bank certificate.

Mr Diokno reiterated the Philippine banking system was in a strong position going into the coronavirus pandemic and well-capitalised.

Meanwhile, Wirecard’s has scrambled to secure a financial lifeline from its banks. Questions over accounting saw it crash in value, leaving the firm facing a looming cash crunch and mired in allegations of fraud.

Mr Braun resigned just hours after releasing a video blaming Wirecard’s problems on fraud, saying he accepted “responsibility for all business transactions lies with the CEO”.

Wirecard, which has seen nearly €10bn (Dh41.1bn) wiped off its market value in just two days, had been a welcome technology success story in Germany, a country better known for its prowess in heavy industry.

But it has been under scrutiny since a whistleblower alleged that it owed its success in part to a web of sham transactions, a scandal that some fear will now damage Germany’s reputation.

Wirecard said in a statement that James Freis, a former compliance officer at Germany’s stock exchange, had been appointed as the firm’s interim chief executive.

It is holding emergency talks with banks to secure a financial lifeline, three people with knowledge of the matter said, after its auditor, EY, would not sign off on its accounts.

On Thursday, Wirecard warned that loans of roughly €2bn could be terminated if its annual report is not published on Friday and it has until evening to strike a deal with the banks, the sources told Reuters.

Wirecard’s share price dropped by as much as 50 per cent on Friday in a continuation of Thursday’s rout, with the stock hitting €20, a far cry from the €200 it was priced at when it joined Germany’s prestigious blue-chip Dax index in late 2018.

“Wirecard is a company that has caused serious damage to the credibility and trust of the Dax with international investors. This will have significant consequences for the image of the German capital market,” Carola Rinker, a German economist specialising in accountancy fraud, said.

Wirecard’s shares tanked again on Friday after two Philippine banks, BPI and BDO, said it was not a client of theirs and alleged that documents had been falsified.

"The initial report is that no money entered the Philippines and that there is no loss to both banks," Bangko Sentral ng Pilipinas governor, Benjamin Diokno, said.

Mr Braun, who has aggressively defended Wirecard against allegations of accounting fraud, had earlier said that the firm could itself have been the victim, without giving details.

“Attempts by Wirecard to appear as the victim in the missing €1.9bn have been undone within hours of Wirecard management’s video yesterday evening,” said Neil Campling at Mirabaud, the only analyst to have a price target of zero.

EY had regularly approved Wirecard’s accounts in recent years, and its refusal to sign off for 2019 confirms failings found in an external probe by KPMG in April.

While Wirecard did not give any details of where the missing money is alleged to have gone, statements by the two Philippine banks denying any involvement spooked investors in the firm.

BPI said Wirecard was not a client, adding: “their external auditor presented to us a document that claimed that they are a client. We have determined that the document is spurious. We continue to investigate this matter,” BPI said in a statement.

The Wirecard scandal, which was extensively investigated by the Financial Times and has been the subject of several reports by so-called short sellers, has also damaged the standing of German financial regulator Bafin.

“Bafin looked on for far too long,” Fabio De Masi, a German lawmaker said, adding that the agency must be improved.

Results

5pm: Wadi Nagab – Maiden (PA) Dh80,000 (Turf) 1,200m; Winner: Al Falaq, Antonio Fresu (jockey), Ahmed Al Shemaili (trainer)

5.30pm: Wadi Sidr – Handicap (PA) Dh80,000 (T) 1,200m; Winner: AF Majalis, Tadhg O’Shea, Ernst Oertel

6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m; Winner: AF Fakhama, Fernando Jara, Mohamed Daggash

6.30pm: Wadi Shees – Handicap (PA) Dh80,000 (T) 2,200m; Winner: Mutaqadim, Antonio Fresu, Ibrahim Al Hadhrami

7pm: Arabian Triple Crown Round-1 – Listed (PA) Dh230,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami

7.30pm: Wadi Tayyibah – Maiden (TB) Dh80,000 (T) 1,600m; Winner: Poster Paint, Patrick Cosgrave, Bhupat Seemar

The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Bio:

Favourite Quote: Prophet Mohammad's quotes There is reward for kindness to every living thing and A good man treats women with honour

Favourite Hobby: Serving poor people 

Favourite Book: The Alchemist by Paulo Coelho

Favourite food: Fish and vegetables

Favourite place to visit: London

What the law says

Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.

“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.

“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”

If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.

UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The Bio

Name: Lynn Davison

Profession: History teacher at Al Yasmina Academy, Abu Dhabi

Children: She has one son, Casey, 28

Hometown: Pontefract, West Yorkshire in the UK

Favourite book: The Alchemist by Paulo Coelho

Favourite Author: CJ Sansom

Favourite holiday destination: Bali

Favourite food: A Sunday roast

THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
The specs

Engine: 4.0-litre V8 twin-turbocharged and three electric motors

Power: Combined output 920hp

Torque: 730Nm at 4,000-7,000rpm

Transmission: 8-speed dual-clutch automatic

Fuel consumption: 11.2L/100km

On sale: Now, deliveries expected later in 2025

Price: expected to start at Dh1,432,000