SINGAPORE: The Monetary Authority of Singapore (MAS) has received a licence application from scandal-hit electronics payments firm Wirecard under the country’s new Payments Services Act, the central bank said on Tuesday.
It said Wirecard’s primary business activities in Singapore are to process payments for merchants and help companies issue pre-paid cards. Wirecard is operating under an exemption until the new law comes into force.
“MAS has required Wirecard to ensure that they keep customer funds arising from these activities in banks in Singapore,” the MAS said in response to a query but did not specify when it had received the application.
Meanwhile, Wirecard’s statement that €1.9 bil (RM8.99 bil) it had booked in its accounts likely never existed has emerged as a black hole that threatens to engulf the payments company and tarnish the reputation of Germany’s financial watchdog.
The one-time investor darling is holding emergency talks with its banks, which are owed roughly €1.75 bil, to avert a looming cash crunch triggered by the missing money.
The episode marks a dramatic turn in the fortunes of a homegrown tech firm that attracted some of the world’s biggest investors before a whistleblower alleged that it owed its success in part to a web of sham transactions.
Wirecard said last week that auditor EY had refused to sign off its 2019 accounts as it was unable to confirm the existence of €1.9 bil in cash balances in trust accounts, about a quarter of its balance sheet.
State prosecutors in Munich investigating the case are considering issuing arrest warrants for its former CEO, Markus Braun, and Jan Marsalek, a board member fired on Monday, according to two people familiar with the matter.
Braun and Marsalek could not be immediately reached for comment, and their lawyers declined to comment.
The furore has also damaged Germany’s image.
Felix Hufeld, head of Germany’s financial watchdog Bafin, described the crisis, which has seen around €11 bil wiped off Wirecard’s market value in recent days, as a “total disaster”, conceding his agency and others had made mistakes.
“It is a scandal that something like this could happen,” Hufeld said.
Wirecard, which started out handling payments for adult entertainment and gambling websites and now processes payments for companies including Visa and Mastercard, has appointed investment bank Houlihan Lokey to help assess its options. – June 23, 2020, Reuters
