Wirecard's offices in Aschheim near Munich, Germany. Picture: REUTERS/MICHAEL DALDER
Wirecard's offices in Aschheim near Munich, Germany. Picture: REUTERS/MICHAEL DALDER

Frankfurt  — Wirecard said on Wednesday that it had widened the scope of a KPMG audit to draw a line under allegations that it manipulated its accounts, adding that it expects to be cleared in a Singapore police investigation.

In October, the German payments company brought in KPMG to investigate allegations by the Financial Times (FT), which Wirecard denies, that its finance team sought to inflate reported sales and profits at its units in Ireland and Dubai.

“We can totally confirm today that all of these allegations are unfounded,” Wirecard CEO Markus Braun said. “But still, to give an additional service to the market and to bring down all these allegations, we decided to include here a second review by KPMG,” he added as the company reported a 43% gain in quarterly profit.

Braun told analysts on a conference call that KPMG’s mandate would be expanded to cover separate claims that Wirecard had overstated cash advances to merchants, and in relation to its accounting for third-party acquiring.

KPMG is expected to complete its work before the end of the first quarter of 2020.

Munich-based Wirecard, founded in 1999 and elevated to Germany’s blue-chip DAX 30 index in 2018, has for years been a target for short-sellers, who bet that a share price will fall.

It has sued the FT, which has stood by coverage that began in January with a story alleging fraud and false accounting at Wirecard’s Singapore office. As much as $10bn (about R148bn) was wiped off Wirecard’s stock market value and police raided its offices in Singapore in the wake of the coverage.

Braun said he expects the Singaporean investigation to confirm the findings of Wirecard’s own law firm, which said there was no evidence of material wrongdoing. “We are very optimistic that in the next month, a couple of months, this can be resolved.” 

Wirecard confirmed its 2019 guidance and forecast core earnings before interest, taxation, depreciation and amortisation (ebitda) in 2020 of €1bn to €1.12bn, implying growth of 34% at the mid-point.

In October, Wirecard, which provides digital payments services to more than 300,000 merchants around the world, told investors it expects its revenues to grow six-fold by the middle of the next decade.

In pursuit of that goal, Wirecard is acquiring an 80% stake in Beijing-based AllScore Payment Systems, establishing a direct presence in China for the first time.

It has an option to buy AllScore outright after two years for a maximum consideration of €109m. China’s ebitda contribution is forecast to reach €50m by 2022, a Wirecard presentation showed.