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Wirecard Shares Jump After Firm Hires KPMG for Independent Audit

Stefan Nicola and Chris Reiter

(Bloomberg) -- Wirecard AG gained as much as 6.6% in Germany after saying it had commissioned KPMG to conduct an independent audit of the digital payments company, its latest effort to calm investors rattled by reports of accounting irregularities.

The audit firm will have “unrestricted access to all information on all levels of the group,” Wirecard said in a statement Monday. KPMG’s review of accusations raised by the Financial Times will begin immediately and will be presented in “due course.”

“We have complete confidence in the audit procedures performed to date and their results,” Chairman Wulf Matthias said in the statement. “We assume this renewed independent review will lead to a final end to all further speculation.”

Shares of Wirecard were up 6.1% to 118.45 euros at 10:22 a.m. in Frankfurt on Monday after earlier gaining as much as 6.6%, the biggest intraday jump since April.

Wirecard’s shares tumbled last week after a FT report over questionable accounting methods, reviving concerns from earlier this year. The company dismissed the claims saying that the figures had been audited by Ernst & Young and that the names mentioned by the FT as having questionable links to the company referred to internal labels for customer clusters.

Wirecard then on Friday tried to regain confidence by announcing plans to buy back as much as 200 million euros ($223 million) in stock.

Why Germany’s Wirecard Is No Stranger to Controversy: QuickTake

The audit is expected to bring “final clarity to the accusations raised by the FT,” Knut Woller, an analyst at Baader Bank who rates the stock ‘buy,’ said in an emailed note to clients.

KPMG is the latest accounting firm called in to weigh in on the controversy. Wirecard had asked E&Y to audit its yearly report, and hired Singapore law firm Rajah & Tann for an in-depth analysis of its accounting practices after the FT first reported on potential misdeeds in late January. E&Y signed off on the 2018 report, and while Rajah & Tann acknowledged some accounting oversights and potential criminal liability for some employees in Singapore, it didn’t find criminal activity linked to Wirecard’s headquarters.

Rather than reporting to Chief Executive Officer Markus Braun or other day-to-day executives, KPMG is “obliged only to the supervisory board” and will be supported by Thomas Eichelmann, head of the body’s audit committee, Wirecard said.

“I am convinced that confidence in our successful and strongly growing business will be strengthened as a result of this independent audit,” Braun said in the statement.

To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net;Chris Reiter in Berlin at creiter2@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, ;Chad Thomas at cthomas16@bloomberg.net, Iain Rogers, Amy Thomson

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