According to the sources of the Wall Street Journal, SoftBank wants to terminate its five-year partnership agreement, struck in April 2019, with Wirecard.
SoftBank was to introduce Wirecard as a digital payments provider to its portfolio of technology companies under the agreement.
Under the agreed terms, SoftBank would have also introduced Wirecard to the Japanese and South Korean markets.
Wirecard is under investigation by the European Union after it reported $2.1 billion in cash had gone missing.
Why It Matters
One of SoftBank’s investment arms had infused nearly $1 billion into Wirecard in April 2019 through a convertible bond, noted the WSJ.
The Japanese conglomerate did not invest any of its own funds into Wirecard. Instead, the money was funneled into Wirecard through the personal accounts of a number of SoftBank’s employees and one outside investor.
Wirecard’s shareholders have filed a criminal complaint against the company’s auditors EY. SoftBank is also mulling legal action against the auditors.
The bank’s $100 billion Vision Fund, which invests in startups, reported losses amounting to $16.5 billion due to soured investments in firms such as WeWork and Uber Technologies Inc (NYSE: UBER).
SoftBank’s OTC stock closed 2.98% higher at $25.93 on Wednesday. Wirecard’s OTC stock closed 39.47% lower at $4.60 on Wednesday.
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