Germany’s Fintech Space Rocked By a Financial Scandal

A financial scandal has rocked Germany’s fintech domain, as Wirecard is allegedly involved. Mark Kristopher G. Tolentino is allegedly behind this, as he is known as Trustee 2 for being the manager of the money. Nonetheless, Tolentino is clearly not responding to the allegations.

A mainstream German daily said Tolentino opened 6 accounts for Wirecard with the Bank of the Philippine Islands (BPI) and BDO Unibank following his appointment as trustee late last year. It was reported that he deposited a sum of 1.938 billion euros (393.5 million euros for Wirecard UK & Ireland Ltd; 400.5 million for Wirecard Technology GmbH; 30 million for Wirecard AG, 20 million for Wirecard Sales International GmbH and about1.1 billion for the subsidiary Cardsystem Middle East FZ LLC).

Wirecard is a financial firm established in 1999 and it served as an issuer for cryptocurrency payment card providers Crypto.com and TenX. In January last year, a senior executive was alleged to have falsified accounts and laundered money. Hence, Wirecard launched a lawsuit in response to unethical reporting and market manipulation.

KPMG was employed to audit the accounts and the feedback provided three months ago noted that it did not receive sufficient documentation to deal with the allegations of accounting irregularities. KPMG attempted to find out how Tolentino and Wirecard relate but the firms did not submit any documents.

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KPMG auditors spoke with these banks but BPI said no business relationship existed with Wirecard, and BDO said Wirecard was not a customer. Moreover, they both told KPMG auditors that the money could not be found, and Philippines’ apex bank also said the 1.938 billion euros did not reach the Philippine financial system.

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The issue has been disastrous for the darling fintech firm in Germany:

“This is a disaster for Wirecard. Suddenly the once celebrated DAX climber is hanging on the drip of his creditor banks, the rating agency Moody’s has downgraded creditworthiness to junk level, and there is a risk of an outflow of customer deposits at the group’s own bank. Germany is experiencing an unprecedented financial scandal. It is a disaster for the business location, for financial supervision and for the auditors who signed Wirecard’s balance sheets.”