Philippine authorities search for Wirecard’s number two in fraud probe

Philippine authorities are searching for Wirecard’s former number two executive Jan Marsalek as part of a broader probe into the payments group, which is battling to survive after acknowledging €1.9bn was missing in a potential fraud.

Menardo Guevarra, the Philippine secretary of justice, told the Financial Times on Wednesday: “I have ordered our National Bureau of Investigation to investigate certain persons here who are allegedly involved in the Wirecard fraud. We are also trying to find out if the Wirecard COO, Jan Marsalek, is in the Philippines. If he is found here, we shall include him in the investigation.”

Mr Marsalek, who was fired as chief operating officer on Monday, may have travelled to the Philippines, a Süddeutsche Zeitung report said on Tuesday evening, citing his “friends”.

Those sources told the German newspaper that Mr Marsalek was not on the run but was trying to obtain documents that could help shed light on the matter.

Munich prosecutors and Mr Marsalek’s lawyer on Wednesday did not immediately respond to a request for comment.

Markus Braun, Wirecard’s former chief executive, was arrested in Munich on Monday and prosecutors said they were investigating the rest of the management board. Mr Braun was released on €5m bail after spending one night in police custody.

Philippine justice secretary Menardo Guevarra has ordered the National Bureau of Investigation to conduct a probe into certain people in the country allegedly involved in the fraud Philippine justice secretary Menardo Guevarra has ordered the National Bureau of Investigation to conduct a probe into certain people in the country allegedly involved in the fraud © AP

The Philippines was the supposed location of €1.9bn of cash that had been reported on Wirecard’s balance sheet but which it said last week was “missing” before saying that it probably does “not exist”.

Wirecard’s auditor EY had been shown documents purporting to show €1.9bn held at two leading Philippine banks on behalf of Wirecard by a local trustee.

However, Benjamin Diokno, Philippine central bank governor, denied that the money had ever entered the country and the banks — BDO Unibank and Bank of the Philippine Islands — said the paperwork was bogus. 

Meanwhile, Wirecard won a brief reprieve from creditors after banks postponed by a few days a decision on whether to terminate €2bn in loans. Restructuring experts at FTI Consulting hired by the creditors are assessing if the struggling Germany payments company can be rescued, according to people briefed on the matter. 

The loans can be terminated as Wirecard last week missed a crucial deadline for the publication of audited 2019 results. The company has warned investors that it previously misrepresented large parts of business activities and accounts for prior years may be inaccurate.

Moody’s last week downgraded Wirecard to junk and on Monday withdrew its credit rating altogether. Shares in Wirecard have fallen more than 80 per cent in less than a week.

According to people familiar with the discussions, a majority of Wirecard’s banks earlier this week agreed not to pull the plug on the once high-flying German company immediately.

Instead, the lenders mandated FTI Consulting to conduct a quick assessment of Wirecard’s financial situation and its odds of survival. The result is expected by the end of this week and will be the basis for the decision to issue a waiver for Wirecard or not. 

Restructuring specialist Houlihan Lokey, which was appointed by the Dax 30 company last week, is working on a restructuring plan that entails the sale of assets, the closure of operations and cutting jobs. “The result would be a radically smaller Wirecard,” a person briefed on the matter told the FT.

The Aschheim-based company, FTI Consulting and Commerzbank, which is co-ordinating the bank consortium, declined to comment. In previous days, Wirecard repeatedly said it was in a “constructive dialogue” with its banks.