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No Missing Wirecard Funds in Philippines, Central Bank Says

Clarissa Batino

(Bloomberg) -- None of Wirecard AG’s missing $2.1 billion of cash entered the Philippine financial system, according to the nation’s central bank Governor Benjamin Diokno, after two of its major lenders denied holding funds for the German payments processor.

BDO Unibank Inc., the country’s biggest bank, and Bank of the Philippine Islands, said on Friday that they didn’t have a relationship with Wirecard and that rogue employees falsified documents that indicated the presence of some funds.

“The initial report is that no money entered the Philippines and that there is no loss to both banks,” Diokno said in a mobile-phone message to reporters on Sunday.

Bangko Sentral ng Pilipinas is conducting its own investigation, he said. Both banks informed Ernst & Young, the external auditor for Wirecard, that documents that attested to the presence of the supposed funds were “spurious,” Diokno said.

Philippine Lenders Deny They Held Wirecard Bank Accounts (1)

“The international financial scandal used the names of two of the country’s biggest banks — BDO and BPI — in an attempt to cover the perpetrators’ track,” Diokno said. The Philippine banking system is in a strong position and well-capitalized, the governor said.

The missing funds, accounting for about a quarter of the German technology firm’s balance sheet, has prompted Wirecard CEO Markus Braun to quit as its shares collapsed. Analysts at Morgan Stanley estimated that Wirecard has available cash of around 220 million euros ($246 million) if it cannot locate the missing $2.1 billion.

Rogue Employees

A document purporting to show a link between Wirecard and the Bank of the Philippine Islands was “bogus” and may be part of an attempted fraud, the president of the Southeast Asian lender said Friday.

A preliminary investigation by BPI revealed that a “very junior officer” of the bank had signed the document and that employee had been suspended, BPI President Cezar Consing said. For BDO, termination proceedings have been initiated against the marketing officer who allegedly fabricated a bank certificate, it said.

It’s not the first time that the Philippine banking sector has dealt with the issue of rogue employees. A branch manager at Rizal Commercial Banking Corp. was found guilty of helping to launder $81 million in stolen funds from the Bangladesh central bank in early 2016.

“The reputation of the Philippine banking system remains intact,” Consing, who is also the head of the nation’s association of banks, said on Sunday. “It was the Philippine banks that identified the documents as spurious,” he said.

(Updates with comments from fourth paragraph)

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