Wirecard shares plunge after €1.9bn goes missing

Wirecard shares plunged after the German payments company said its auditor could not find €1.9bn (£1.7bn) of bank deposits and that fraud may have occurred.

The company said Ernst & Young, its auditor, refused to sign off the 2019 financial statements because it did not have evidence of the money, which makes up a quarter of the company's balance sheet, supposedly held in two escrow accounts.

Wirecard shares fell 46% to €56 at 11:23 BST. The shares have lost almost two-thirds of their value in the past year.

The company said its subsidiaries had paid €1.9bn of security deposits into the accounts, held at two Asian banks, to guarantee risk management for merchants. The company said there were signs that "spurious balance confirmations" had been presented to deceive EY and give the impression the cash was there.

Markus Braun, Wirecard's chief execuive, said: "We are in contact with the trustee present on site. Previously issued confirmations by the banks were no longer recognised by the auditor. All parties involved are endeavouring to clarify the matter as quickly as possible.

"It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred. Wirecard AG will file a complaint against unknown persons."

EY's audit of Wirecard's financial statements was due to conclude on Thursday. If certified annual statements are not available on Friday, about €2bn of loans to Wirecard can be terminated, it said.

The company has postponed the publication of its 2019 results three times as it has sought to reject allegations of fraud. The Financial Times reported in October that Wirecard employees appeared to have inflated sales and profits at subsidiaries in Dubai and Dublin to mislead EY for a decade.