Wirecard: Insolvency administrator publishes new status report

Fol­low­ing the re­view meet­ing held on April 7, 2022, the in­solv­ency ad­min­is­trator of Wir­e­card AG, Dr. Mi­chael Jaffé, has now pub­lished a new status re­port on the in­solv­ency proceedings.

One oft he main top­ics oft he new re­port was the li­quid­a­tion of Wir­e­card AG’s former sub­si­di­ary, Wir­e­card Bank. Ac­cord­ing to Mr. Jaffé, the in­solv­ency ad­min­is­trator was able to li­quid­ate al­most 227 mil­lion euros.l The fin­an­cial su­per­cis­ory au­thor­ity BaFin had ini­tially frozen Wir­e­card Bank’s money after the scan­dal be­came known, but has now re­leased it again.

The in­solv­ency ad­min­is­trator was also able to in­crease the as­sets from the li­quid­a­tion of in­dir­e­cetly valiable sub­si­di­ar­ies of Wir­e­card AG.

How­ever the re­port also shows that des­pite the se­cured funds, the claims of cred­it­ors and share­hold­ers are likely tob e dis­pro­por­tion­ately higher. For this reason, the in­solv­ency ad­mis­trator is un­able to provide any in­form­a­tion on the tim­ing and amount of an ini­tial pay­ment on ac­count at this time. In­jured in­vestors must con­tinue to be patient.

Investigations by the insolvency administrator against EY

As in the pre­vi­ous status re­port the in­solv­ency ad­min­is­trator once again made it clear that the audit­ing firm EY – against which we are also rep­res­ent­ing nu­mer­ous in­vestors in court – con­tin­ues to re­fuse any as­sist­ance in cla­ri­fy­ing the facts oft he case.

To this end, the in­solv­ency ad­min­is­trator has com­mis­sioned an ex­ternal audit­ing firm to provide an ex­pert opin­ion on the ques­tion of whether EY com­plied with ist du­ties in con­nec­tion with the audits oft he fin­an­cial state­ments or whether there were any breaches of duty.

Ac­cord­ing to Mr. Jaffé, the cla­ri­fic­a­tion work in this re­gard is well ad­vanced, but still not complete.

Action for a declaration of invalidity of the 2017 and 2018 annual financial statements

Back in May 2022, we re­por­ted that the Mu­nich I Re­gional Court had de­clared Wirecard’s fin­an­cial state­ments for 2017 and 2018 null and void based on a law­suit filed by the in­solv­necy administrator.

The law­suit was based on the al­leged fic­ti­tious book­ings with which man­agers oft he com­pany are said to have in­flated the bal­ance sheets by fic­ti­tious amounts in the billions.

Ac­cord­ing tot he status re­port, this de­cision re­moves the basis for pay­ing di­vidends to share­hold­ers for the years in ques­tion. In his re­port, how­ever, in­solv­ency ad­min­is­trator Jaffé presen­ted a claw­back of di­cidend pay­ments as un­likely: „Any claw­back of di­vidends will there­fore have no eco­nomic sig­ni­fic­ance fort he vast ma­jor­ity of small and private investors.“

In any case, he said, it was ques­tion­able whether it could take place at all in the case of very small amounts.

New test date

The new re­view date in the Wir­e­card AG in­solv­ency pro­ceed­ings has been set for Novem­ber 29, 2022.