Green light: Wirecard shares up more than 70%: Wirecard is allowed to resume payment services in Great Britain – further lawsuit against EY and Braun | message


The FCA financial market regulator gave the green light late Monday evening for the Munich-based company to process electronic payments in the UK again. Customers could use their cards as usual, the agency said. However, the FCA wants to keep a close eye on Wirecard’s business. The financial market supervisory authority had prohibited Wirecard Card Solutions Ltd with immediate effect from all regulated activities. In addition, the FCA had banned the transfer of funds and assets. The Wirecard parent company filed for bankruptcy on Thursday.

Further lawsuit against Wirecard auditor EY and ex-boss Braun

The law firm Tilp has extended its claim for damages against Wirecard to the auditor Ernst & Young (EY) and former board members of the collapsed payment processor.

“We are convinced of the new defendant’s intentional behavior, at least to a limited extent,” said lawyer Andreas Tilp on Tuesday. In addition to EY, which has checked Wirecard’s balance sheets for years, the lawyers are suing ex-Wirecard boss Markus Braun, the former board member Jan Marsalek and the current head of finance, Alexander von Knoop.

Tilp had already filed a lawsuit against the group and filed for a model case at the Munich Regional Court in mid-May – long before Wirecard’s insolvency. More than 30,000 investors have already turned to the Tübingen law firm, which is also taking legal action against the carmaker VW because of the diesel scandal. A model case is a kind of class action lawsuit, in which one complains in the name of many.

Wirecard had admitted that the balance sheet was 1.9 billion euros short and filed for bankruptcy a few days later. EY’s auditors got the ball rolling because they encountered irregularities while reviewing 2019 balance sheet documents. However, the auditors are accused of not having raised the alarm earlier – they have been checking the Wirecard balance sheets for many years.

Berliner Solarisbank interested in Wirecard customers

The Berlin Solarisbank strengthened with a fresh round of financing shows interest in customers of the insolvent payment processor Wirecard.

“We probably understand the business better than anyone else in the market,” Solarisbank chief Roland Folz told Reuters on Tuesday. “We’d be happy to talk to some of the customers and perhaps employees and see how we can help them with our platform.” Folz did not want to comment specifically on the question of whether Solarisbank could also take over parts of the insolvent DAX group such as Wirecard Bank AG. In this context, he emphasized that the company wanted to concentrate on its own growth.

For the current year, Folz, who worked for Deutsche Bank for a long time, expects sales growth of between 60 and 80 percent. “Growth is currently more important than profit,” summarized Folz. The startup, which was founded in 2016 and has its own banking license, has built a platform that other companies can connect to in order to become providers of financial services themselves. The company now has more than 400,000 end customer accounts. In the Corona crisis, Berliners launched a new round of financing.

“The 60 million euros we have raised are significantly more than originally targeted,” said strategy director Layla Qassim and announced that the money would primarily be invested in European expansion. The round was led by financial investor HV Holtzbrinck Ventures. Existing investors such as the Spanish major bank BBVA and the Dutch money house ABN Amro also participated. The Solarisbank is now valued at EUR 320 million.

Wirecard with further course capers

There is also wild back and forth on Tuesday for Wirecard shares. The papers of the payment processor threatened in its existence in XETRA trade temporarily headed for a further tripling with more than 9 euros. At 5.66 euros they cost 73.65 percent more than the previous day. The shares of the company shaken by a balance sheet scandal are increasingly becoming a short-term speculative object. Last Friday they had only cost a good euro.

Already on Monday they could more than triple in the meantime – after almost 99 percent loss in value within a few trading days, however. For comparison: just over two months ago, the shares had still cost over 140 euros and at the record high in early September 2018 shortly before the DAX rise, 199 euros had been paid.

Following the group’s bankruptcy filing last week, the North American subsidiary Wirecard North America is now up for sale and the British financial regulator FCA wants to allow the company to continue doing business. On Friday, the FCA shut down the local subsidiary Wirecard Card Systems and prohibited any transfers of funds and assets.

Wirecard should be kicked out of the DAX after the quasi-total loss in September at the latest for the next regular index review by Deutsche Börse. Quite a few market experts shake their heads at this and call for the “Fast Exit”, that is, quick exclusion from the leading index. “Absurd, not a good sign for the stock culture in this country,” said the tenor.

Deutsche Börse reacted on the previous day and announced a revision of its rules for DAX membership. The ejection for Wirecard from the pan-European Stoxx Europe 600 went faster: as of Tuesday they are no longer included.

The violent price erosion of the Wirecard share has hardly any fundamental reasons, but rather is evidence that the low-level paper is mainly bought by speculators who rely on a quick recovery and then cash in just as quickly.

By Adria Calatayud

(Dow Jones / Reuters / dpa-AFX)

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Image sources: CHRISTOF STACHE / AFP / Getty Images

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