Auditor EY has refused to sign off the accounts of payments company Wirecard over €1.9bn of cash for which it could find no evidence.
The German payments processor, which has provided the financial backbone for countless fintech companies including Monzo, Revolut, Loot, Curve, Funding Circle, Atom, Tandem and Pockit, said Ernst & Young’s Munich office had told it “no sufficient audit evidence could be obtained so far of cash balances on trust accounts”.
The auditor said it had “information indicating that spurious or falsified balance confirmations have been provided”.
Wirecard warned that a failure to publish its certified account by Friday would mean that lenders could call in roughly €2bn of loans.
“There are indications that spurious balance confirmations had been provided from the side of the trustee,” the Munich-headquartered company said, adding that this has been “in order to deceive the auditor and create a wrong perception of the existence of such cash balances or the holding of the accounts for to the benefit of Wirecard group companies”.
In a report published last month by KPMG into allegations of fraud at the company between 2016 and 2018, accountants said they had been unable to verify the existence of €1bn euros in revenue booked through partners.
A report about Wirecard published in February 2016 by Zatarra Research, a pseudonym for short-sellers Matthew Earl and Fraser Perring, alleged that Wirecard was linked to the laundering of money from US-focused offshore poker sites, while the Financial Times raised various allegations of irregularities at the group.
Germany’s financial regulator, Bafin, has since launched investigations into the payments company.
Wirecard has a banking license in Germany and is able to issue cards from Visa and MasterCard, which has been used by fintech startups to help issue cards, process payments and sublet its banking license.
EY was also the auditor of collapsed former FTSE 100 group NMC Health and troubled payments group Finablr.