One day after the FT published an explosive story (with the help of a company "whistleblower") detailing allegations of brazen accounting fraud at German payments company (and market darling) Wirecard, Singapore police have raided the company's offices in the city-state.
The raid is the first sign that authorities are looking into criminal charges against the company following details from a law firm's internal investigation were leaked to the FT, calling the company's metrics about usage of its payments network into question. After news of the raid broke, media reports surfaced claiming Munich prosecutors have opened a market manipulation probe into Wirecard.
"The Singapore police has raided the premises of Wirecard in Singapore today," a police spokesperson told the Financial Times on Friday. About 10 officers in the police’s commercial affairs department swooped on Wirecard’s Singapore offices at 10.30am, according to one person familiar with the situation. The police did not confirm which unit carried out the operation, or what materials, if any, were taken in the raid.
Wirecard again denied the allegations from the FT report and asserted that the allegations have already been vetted by the law firm that prepared the internal report.
"[T]hese allegations have been investigated in a robust compliance process both by our internal compliance team and by an independent investigation conducted by a law firm specialising in compliance (Rajah & Tann)."
It continued: "Neither the internal investigation by our compliance department has found any confirmation for the allegations made, nor has the external investigation by Rajah & Tann to date produced any conclusive findings regarding criminal misconduct by employees or managers...The investigation by Rajah & Tann is about to be completed and we will announce the results in due course."
Once again, Wirecard shares slumped on the news:
According to the FT, officers questioned Wirecard employees and senior managers about the company's financial structure and also asked employees to identify members of the company's finance team, as well as detail their responsibilities. Police also questioned senior executives, including Fook Sun Ng, a senior manager at Wirecard Singapore. Though Edo Kurniawan, one of the employees responsible for supervising the fraud in the company's Asian operations, according to the FT's initial reports, wasn't at the office during the raid. Since Wirecard isn't regulated by the Singaporean Monetary Authority, any investigation into the company would be led by the city-state's police.
But with Wirecard shares slumping on fears that it might prove to be Germany's answer to Theranos, nervous investors, who helped the company's share price nearly quintuple over a span of less than four years, are probably looking out for the next shoe to drop.