German Bank Raided Over $117M Wirecard Loan
A team of police and investigators raided the headquarters
of KfW, a German state-owned development bank, over a 100 million euro ($117
million) loan it made to Wirecard, the Financial Times (FT) reported.
Frankfurt prosecutors are investigating the loan, according
to FT. A spokesperson for the lender said the company is cooperating with
police and confirmed the raid occurred two weeks ago.
On Tuesday (Sept. 29), German police raided Wirecard’s
headquarters on the outskirts of Munich in Aschheim as part of the same
investigation, FT reported.
KfW Ipex Bank, a subsidiary, provided Wirecard with the
unsecured loan two years ago and extended it last year, according to FT. After
Wirecard filed for bankruptcy protection in June, KfW sold the loan to a
distressed-debt investor and took an undisclosed loss.
At the center of the probe is whether the bank’s decision to
provide and extend the loan may have been a breach of fiduciary duty, a
spokesperson for the Frankfurt prosecutors’ office told FT.
KfW is not the only bank to issue Wirecard a loan, FT
reported. Frankfurt-based Commerzbank, part of a consortium of 15 lenders who
provided 1.75 billion euros ($2 billion) in credit to Wirecard, wrote off 97
percent of the loan in August, FT reported.
Also last month, three of the biggest lenders to the
one-time FinTech leader have declared losses.
ING Group in the Netherlands and Commerzbank each took a hit
of 175 million euros ($207 million), more than half of their profit for the
second quarter. Credit Agricole, the French financial institution, suffered a
loss of about 110 million euros ($130.6 million).
Wirecard, once valued at $28 billion, filed for insolvency
in June after admitting that 1.9 billion euros ($2.1 billion) said to have been
deposited in two Philippines banks did not exist.
Last month, reports stated that in anticipation of its
collapse in June, Wirecard executives may have raided the German payment
company and deposited $1 billion in partner companies while it fought
allegations of accounting fraud.
The alleged theft took the form of unsecured loans. At the
time, Wirecard said the loans were used to pay its partners in Dubai, Singapore
and the Philippines who processed card transactions.
Comments
Post a Comment