Wirecard UK unlocks cash for customers

Cornelia Mascio
Giugno 30, 2020

WIRECARD, the German scandal-hit payments company, said on Saturday it would proceed with business activities after filing for insolvency and expects a provisional administrator to be appointed by judicial authorities shortly. The FCA said it would continue to monitor the firm closely.

"With the exception of a small development branch office, no insolvency applications have been filed by Group companies at present". "The management board is of the opinion that continuation is in the best interests of the creditors".

At 0820 GMT, Wirecard shares traded 170% higher at EUR3.45, although shares are down 97% in the year to date.

"Wirecard shares have soared today on chatter that Worldline, the French payments group, might seek to buy parts of the struggling company", David Madden, market analyst at CMC Markets, said. "Whether insolvency proceedings will be opened is still under review". Wirecard also said it hoped its United Kingdom business, suspended by the Financial Conduct Authority on Friday, would continue trading after talks with the regulator.

The regulator's focus was to make sure that the money of customers held in safeguarded accounts was protected.

Britain's Financial Conduct Authority (FCA) has imposed a number of requirements on Wirecard, including not to dispose of any assets or funds, and not carry out any regulated activities. "However, we can not lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns for example that all clients' money is safe". The company's unravelling quickened earlier this week when it said that €1.9 billion previously reported as cash on its balance sheet probably doesn't exist.

Markus Braun, who drove the company's rapid growth, resigned after the missing money was declared and was arrested and bailed in Germany.

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