Wirecard faces legal action by TCI Fund Management

Source: IBS Intelligence 2020-05-20

UK-based fund manager TCI Fund Management has filed a criminal complaint against responsible parties of Wirecard AG with the public prosecutor’s office in Munich, Germany.

In a dual language (German/English) statement published on 19 May 2020, the fund manager said: “The background to this is that, in the view of TCI, the KPMG report published by Wirecard on 28 April 2020 as well as public reporting, including that in the Financial Times and WirtschaftsWoche, reveal anomalies that may have criminal relevance.

“This relates to the purchase of Hermes I Tickets Pte. Ltd. in India, the so-called “third-party acquiring business” as well as the granting of loans within the scope of the so-called “merchant cash advance business”. Funds managed by TCI hold a “short position” in Wirecard shares. In accordance with legal requirements, TCI has notified the short position to the relevant competent authority, BaFin, and published it in the Federal Gazette. Most recently, on 29 April 2020, TCI published a net short position of 1.53% of Wirecard’s issued share capital in the Federal Gazette and reported it to BaFin.”

In a letter addressed to Thomas Eichelmann, Chairman of the Supervisory Board of Wirecard, dated 28 April, TCI Fund Management had specifically called on Wirecard’s Supervisory Board to take action.

The letter noted concerns over the independent investigation into Wirecard’s accounts, saying “…we assume that the supervisory board was well aware of the difficulties KPMG encountered in properly conducting the audit. Given the allegations raised against Wirecard and its executive team by various whistleblowers and newspapers, it could not be more obvious that there is a need to take measures to avoid the likely conflict of interest whereby management supervises an audit of their own actions.”

The letter went on to say that it was “necessary for the supervisory board to take direct responsibility for this investigation immediately and to resolve the outstanding questions that the report has failed to answer… Otherwise, in our opinion, the supervisory board commits a breach of duty of care…”

Wirecard faces legal action by TCI Fund Management

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