(Bloomberg) -- Wirecard AG Chairman Wulf Matthias resigned after months of controversy over the digital payments company’s accounting practices.
Matthias stepped down as chairman of the supervisory board for personal reasons, and will be replaced by Thomas Eichelmann, the Aschheim, Germany-based company said Friday in a statement. Matthias will remain a member of the board.
The payment processor’s shares have whipsawed for more than a year after several media reports raised questions about accounting methods, all of which the company has rejected. The concerns relate to Wirecard’s Singapore operations. Wirecard has said its reporting obligations were “followed properly.” Shares are down more than 40% from their peak in March 2018.
Eichelmann was a member of Wirecard’s supervisory board and head of the body’s audit committee. He has held various other supervisory positions over the past decade, including at construction group Hochtief AG and financial services company Wuestenrot & Wuerttembergische AG.
Supervisory boards in Germany play an important role as they are formed of shareholders and employee representatives, who oversee the management and approve major business decisions.
The role of the supervisory board “is key,” especially in Wirecard’s case, according to Neil Campling, an analyst at Mirabaud Securities. KPMG, which has been commissioned to perform an independent special audit on the back of the allegations, is accountable only to the supervisory board, he said.
“Eichelmann is the man who was tasked with supporting the audit on Wirecard’s side.”
Matthias has faced a battle to calm investors rattled by reports of accounting irregularities.
Wirecard’s revenue soared in 2018 after it bought more than 15 companies in a few years. But in a series of articles last year, the Financial Times reported allegations of accounting fraud at Wirecard in Singapore and other Asian countries.
The company hired law firm Rajah & Tann to investigate. A final report from the firm in March 2019 acknowledged accounting oversights and potential criminal liability among some Singapore staff, but didn’t find evidence of criminal activity linked to Wirecard’s German headquarters.
The FT then reported in October that payments processed by a Dubai-based partner company in 2016 and 2017 may not have taken place. Wirecard called those allegations “total nonsense,” but controversy has continued to dog the company, which is a member of Germany’s benchmark DAX index.
“The more we dig on Wirecard, the more disturbing it looks,“ Campling wrote in a December research note.
(Updates with analyst’s comments from sixth paragraph.)
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