January 11, 2020 / 8:22 AM / 2 months ago

Board member overseeing Wirecard audit elected chairman

BERLIN (Reuters) - The board member overseeing an outside audit of Wirecard has been elected as chairman of the German payments company as it battles allegations of fraud and false accounting that have hit its share price.

Thomas Eichelmann, a former chief financial officer of the Frankfurt Stock Exchange, was elected by the supervisory board after Chairman Wulf Matthias, 75, resigned for personal reasons, Wirecard said in statement late on Friday.

Eichelmann, 54, was brought in last year and heads the audit committee at Wirecard, which was founded during the first internet boom and has grown to command a slot in Germany’s DAX blue-chip index.

The company has for years been a favorite target of short sellers, who seek to profit from share-price falls resulting from the release of negative information. It was hit a year ago by allegations in the Financial Times that its Singapore office made fake book-keeping entries to ‘pad’ its revenues.

In-house auditor EY investigated those claims and gave Wirecard management a clean bill of health. The company denied the allegations and sued the FT, which stands by its reporting.

Further allegations - including that the finance team sought to inflate sales and profits at its units in Ireland and Dubai - led Wirecard to hire KPMG last autumn to conduct an outside audit that is expected to be completed by March.

A source close to the supervisory board has told Reuters that the KPMG audit was supported by the entire board, and that it had been given a mandate to investigate all allegations made by the Financial Times.

Matthias, who joined as chairman in 2008, will remain a member of the board, the company said.

German daily Handelsblatt reported last year Matthias would not stand for a second term.

Wirecard last year struck a strategic partnership with Softbank that has yielded payments cooperation deals with some of the companies in the $100 billion Japanese venture fund’s portfolio.

Additional reporting by Bhargav Acharya in Bengaluru; Editing by Aditya Soni and Jane Merriman

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